(Bloomberg) -- Paytm founder Vijay Shekhar Sharma will acquire a 10.3% stake from China’s Ant Group Co., in an unusual transaction that will make the entrepreneur the company’s single biggest shareholder without paying any cash.

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Sharma, also chief executive officer of Paytm-parent One97 Communications Ltd., will increase his holding in the Indian fintech company to 19.42% while Ant’s drops to 13.5%, according to a regulatory filing. Ant gets convertible securities that will give it the option to recoup its stake in future. That means it can raise its holding back to above 23% at a later date, potentially benefiting if Paytm’s stock price rises, though the company didn’t specify a timeframe for exercising that option.

For now, the deal reduces a large overhang on the market as investors had bet that Ant, the Chinese fintech pioneer backed by billionaire Jack Ma, would eventually offload a chunk of its Paytm shares. By taking control, Sharma also addresses concerns that a prominent Chinese company is running one of India’s best-known tech firms, at a time tensions between the two countries are rising.

Paytm’s shares surged as much as 11% Monday, building on a 50% rally in 2023. It had shed some gains and was up about 7% in late trading.

“This acquisition could be for the optics of getting rid of the tag of being a Chinese company. However, the big positive is that Vijay Shekhar Sharma is increasing his commitment to the company,” said Shriram Subramanian, founder of InGovern Research, a corporate governance advisory firm. “The overhang” of Ant selling shares “will go away.”

Geopolitics has complicated Paytm and Ant’s relationship. India has clashed with China in recent years in a dispute that hurt Chinese companies’ ability to operate in the neighboring country. This year alone, India issued orders to block more than 200 apps and websites, largely linked to China.