Alibaba Said To Pare Its Stake By Half In Paytm As Stock Tumbles
The stock has struggled since its much-hyped trading debut in November 2021, in what was then India’s biggest initial public offering, raising $2.5 billion.
(Bloomberg) -- Paytm, India’s leading digital payments brand, saw a partial exit by one of its early backers with a unit of Alibaba Group Holding Ltd. selling a 3% stake in the fintech firm, according to people aware of the matter.
One 97 Communications Ltd., which operates Paytm, closed 6.2% lower in Mumbai after 19.2 million shares were sold in a block trade early Thursday, according to data compiled by Bloomberg. The sale was by an Alibaba unit the people said, asking not to be named, as the information regarding the seller is not public yet.
The stock has struggled since its much-hyped trading debut in November 2021, in what was then India’s biggest initial public offering, raising $2.5 billion. SoftBank Group Corp., another early investor, had lowered its stake in the firm in November after a lockup on its shares ended.
The company has announced an ambitious path to breakeven on an adjusted ebitda basis by September this year and will be spending $103 million to buy back some of its shares, a move aimed at supporting its struggling stock price. Shares of Paytm gained for a record nine straight sessions before Thursday’s selloff.
A Paytm representative declined to comment, while Alibaba didn’t immediately respond to an email seeking comment. Alibaba.com Hong Kong Ltd. held a 6.3% stake in the company as of Sept. 30, while SoftBank and Antfin Singapore Holding Pte Ltd. own about 17% and 25%, respectively.
“Alibaba seems to be in the exit mode from India as it has sold shares in its major investments, including Zomato,” Avinash Gorakshakar, head of research at local brokerage Profitmart Securities Pvt. said. “Paytm is on the fast track to profitability and has been delivering good business updates.”
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