Foreign stake falls below 50% threshold
Foreign investors reduced their stake in Paytm to 49.4% during the March quarter (Q4 FY26), according to Inc42 Media. The change marks a technical threshold for ownership: as foreign investor holdings slipped below 50%, Paytm moved to a structure described as an Indian owned and controlled company (IOCC) in an exchange filing, with domestic investors holding 50.3% of equity share capital in Q4 FY26.
Foreign institutional investor holdings decline
Foreign institutional investors (FII) decreased their stake in Paytm to 49.4% from 51.76% in the prior quarter (Q3 FY26), according to Inc42 Media.
Category I FPIs—which include government-related entities such as sovereign wealth funds and central banks, along with pension funds—cut their holdings to 23.77% in Q4 from 25.33% in Q3. The number of Category 1 FPIs fell to 558 from 613.
Category II FPIs—which include mutual funds, banks, and insurers—also declined. Their stake dropped to 0.48% from 1.24%, with 19 shareholders from this category quitting Paytm’s cap table.
Meanwhile, foreign direct investments (FDI) saw a marginal quarter-on-quarter decrease: a 15 basis point QoQ drop to 25.18% in the March quarter.
Domestic institutional investors increase holdings
As foreign investor holdings fell below 50%, domestic investors became the dominant category on Paytm’s cap table. In Q4 FY26, domestic institutional investors increased their stake to 23.08% from 20.32% in the previous quarter.
Within domestic institutional ownership, mutual fund holdings rose to 16.6% from 14.34%. Inc42 Media reports that five new mutual funds joined Paytm’s shareholder list during the quarter, bringing the total number of mutual funds on the cap table to 51. One of the new entrants is Bandhan Bank’s Large and Mid Cap Fund, which now holds a 1.32% stake in Paytm.
Insurance companies also increased their participation, with their stake rising to 5.08% from 4.77% during the same period.
Broader market context: foreign outflows from Indian equities
The decline in FII holdings occurred amid broader foreign investor outflows from Indian equities. Inc42 Media reports that FPIs sold Indian equities worth ₹1.17 Lakh Cr during the March quarter. This suggests that Paytm’s change may reflect wider capital reallocation patterns rather than company-specific factors.
Financial performance in the same period
Paytm’s ownership changes occurred alongside reported profitability metrics. Inc42 Media reports that Paytm posted a profit of ₹225 Cr on an operating revenue of ₹2,194 Cr in Q3 FY26. The ownership structure shift and financial performance occurred in parallel during this period.
Source: Inc42 Media