Currently, the talk of the town is that Ant Group, an affiliate fintech company of the Chinese Alibaba Group, is in thoughts of selling five percent from the 30.33 percent stake held in One97 Communications, the parent company of Paytm, before the latter's IPO in November.

Paytm on the other hand wishes to reduce Ant's stake under 25 percent to meet Securities and Exchange Board of India's (SEBI) requirements for listing as a professionally managed company and this is said to most likely appear as Paytm’s Offer For Sale (OFS).

Based on Paytm's current worth of $16 billion, Ant Group is attempting to sell the stake for over $800 million (around Rs 6,000 crore).

Similar to the food tech platform, Zomato, the offer can also be divided as a Qualified Institutional Placement (QIP) ahead of the IPO.

Therefore, rumours have it that Ant is aiming to sell at least five percent of its stake in Paytm to clear regulatory barriers and complete the IPO. Some of the other investors may be able to sell smaller amounts of their holdings as well.

But regulatory experts say that, this can be accomplished by reducing all investors' interests to under 25 percent and diluting certain beneficial ownership criteria, as instructed by Sebi and the Companies Act.

For that matter, Paytm is said to considering Ant Group and Alibaba, which own a combined 38 percent of the firm, as two independent investors.

Thus, it is said that if Ant and Alibaba are considered as separate entities with no common interests or plans, it will be easier for Paytm to comply with Sebi requirements.

However, earlier, one of Paytm’s shareholders is believed to have accepted a resolution to declassify founder Vijay Shekhar Sharma as a promoter to comply with these rules. Paytm views that its IPO process could be accelerated if the company is operated properly, as this reduces the compliance load on investors and promoters.

The sale of shares by Paytm's large global shareholders is said that it would not be on a pro-rata basis But due to regulatory restrictions, Ant Group is likely to sell all of its shares.

The magnitude of this transaction is said to alter depending on the company's valuation during the public offering and the pre-IPO round. The details are still being worked out.

Paytm is said to be seeking for a $30 billion valuation and could be preparing an IPO around Diwali this year.

At an extraordinary general meeting on July 12, the firm gained approval from its shareholders to fund Rs 12,000 crore through a new share offering. The total payment would be Rs 16,600 crore, including OFS.