Alibaba sells a $125 million block deal stake in Paytm
- ByStartupStory | January 13, 2023
China’s Alibaba Group sold a 3.1% share in the Indian company Paytm for a total of US$125 million on Thursday, Jan. 12, according to a source with direct knowledge of the transaction.
The company’s shares dropped as high as 8.8% in afternoon trading, to 528 rupees (S$8.61), and were down 5.8% as of 3 pm Indian Standard Time.
Alibaba sold the stake at a price of 536.95 rupees a share, according to the source, who asked to remain anonymous. At the end of September, it owned a 6.26 percent interest in Paytm.
According to the insider, Alibaba received advice on the transaction from Morgan Stanley. Requests for comments received from Morgan Stanley and Alibaba did not immediately receive a response.
After announcing impressive early results for its third quarter, Paytm’s stock has increased by 9% this year. Despite the corporation initiating a share buyback in December, it ended 2022 with a 60% loss.
Paytm, formerly One97 Communications, went public in 2021 following a massive US$2.5 billion IPO (IPO).
Since then, the stock has fallen almost 75% from its IPO offer price as investors began to doubt the company’s ambitions for monetisation. This occurred amid concerns over the exorbitant valuations of internet companies and anxieties of a global economic downturn.
A 4.5 percent interest in the e-payments company owned by SoftBank Group was sold in November for $200 million. At the end of September, it owned a 17.5% interest in Paytm.
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