Fintech

Berkshire Hathaway Exits Paytm with Rs 506 Crore Loss in Block Deal

• ByStartupStory     |    November 25, 2023

Berkshire Hathaway, the investment powerhouse owned by Warren Buffett, has divested its entire stake in One97 Communications, the parent company of Paytm, in a notable move resulting in a loss exceeding Rs 506 crore. The transaction, conducted as a significant block deal, saw Berkshire’s unit BH International Holdings sell 1.56 crore shares, equivalent to 2.46% of the equity, for nearly Rs 1,370 crore. The shares were acquired by Ghisallo Master Fund and Copthall Mauritius Investment, obtaining 0.67% and 1.19% stakes, respectively.

Warren Buffett initially invested in Paytm in 2018, injecting nearly Rs 2,200 crore into the company. This marked Buffett’s first investment in an Indian firm, valuing Paytm at approximately $10-12 billion. Notably, during Paytm’s IPO in 2021, BH International Holdings sold over 14 lakh shares for Rs 301.7 crore.

As of the latest update, One 97 Communications Ltd’s share price settled at Rs 895 apiece, reflecting a 3.08% decline on the NSE on Friday. Concurrently, another significant investor, Softbank, has been steadily reducing its stake in Paytm over the past year and currently holds a position below 10%. Reports suggest that Softbank is planning a gradual exit from the company, intending to sell its remaining holdings. In a separate development, China’s Alibaba Group sold a 3.16% stake in Paytm through the open market, amounting to a Rs 1,378 crore deal in February. This move signifies Alibaba’s complete divestment of its direct stake in the company.

Despite these shifts in ownership, Paytm reported a noteworthy 32% surge in revenue, reaching Rs 2,519 crore in the July-September quarter (Q2 FY24). Additionally, the company narrowed its losses to Rs 292 crore, a marked improvement from the Rs 571.5 crore net loss recorded in the corresponding period of the previous year. Paytm continues to navigate the dynamic landscape of financial markets, drawing attention from both investors and industry observers.

Follow Startup Story