The development comes amid increasing regulatory focus on ownership structures of fintech firms.

A closer look at the company's shareholding pattern shows a clear shift over the past two years. Foreign institutional investors (FIIs), which held a dominant 72.11% stake in June 2023, have reduced their holding to 49.4% as of March 2026.

In contrast, domestic institutional investors (DIIs) have significantly increased their stake in the company. Their shareholding has jumped from 3.54% in June 2023 to 23.08% in March 2026. The public shareholding also saw a slight increase, which rose from 24.35% in June 2023 to 27.51% in March 2026.

The decline in foreign ownership, coupled with a sharp rise in domestic institutional holding, has been a key factor in making Paytm a majority Indian-owned firm. With increased participation from DIIs and public shareholders, the overall Indian shareholding has risen to 50.59%.

The data also indicates that domestic capital has been consistently increasing its exposure to the company, even as foreign investors trimmed their positions over multiple quarters.

The change in ownership comes at a time when companies with foreign investments, particularly those linked to entities such as Ant Group, have been under closer regulatory scrutiny in India.

Becoming a majority Indian-owned company could help Paytm address regulatory concerns and improve operational flexibility, especially in its financial services business.

On the financial front, One97 Communications has also shown improvement in its performance. The company reported a 20% year-on-year increase in revenue to Rs 2,194 crore in Q3 FY26, up from Rs 1,828 crore in the same quarter last year. It also posted a net profit of Rs 225 crore during the quarter.

Following the development, shares of Paytm rose 3.23% to Rs 1,142.3, taking its total market capitalisation to Rs 73,158 crore (around $7.95 billion).