Airtel+Paytm: To merge or not to merge

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Editor's note: Two weeks ago, I wrote in this newsletter that 2023 might see a number of mergers and acquisitions in the fintech space. Last week, the country’s two leading payments banks were reportedly looking to combine their operations. Bharti Airtel founder-chairman Sunil Mittal was looking to fold his telecom giant’s financial services arm, Airtel Payments Bank, into Paytm Payments Bank in an all-stock deal, Bloomberg reported. But this week, those talks collapsed, according to Moneycontrol. Also, The Economic Times reported that Japan’s SoftBank and China’s Ant Group had approached Mittal to buy out their stake in Paytm (i.e. One97 Communications Ltd), but that conversation did not make much headway; the two investors are now likely to offload their stakes in the fintech company in the open market. The news of the Airtel-Paytm talks, regardless of their fate, hardly comes as a surprise. Last year, Paytm’s top management had informal chats to explore a stake sale with two large corporate houses, several industry insiders told me.  Ever since the digital payments giant listed on the bourses in November 2021, things haven’t quite …