Alibaba Group sells its remaining stake in Paytm for a value of Rs. 1,378 crores

Chinese Alibaba Group has sold its remaining stake in Indian digital payments company Paytm for around Rs. 1,378 crores via a block deal, according to stock market data released on Friday.

The exit comes days after Paytm posted its first-ever quarterly operating profit as a listed company, nine months ahead of its own target.

Alibaba.com Singapore E-Commerce sold 21.4 million shares of Paytm on Friday at Rs. 642.74 each, a discount of 9% from Thursday’s close, according to data from the NSE exchange.

Shares of Paytm fell almost 8% on Friday to close at Rs. 650.55, but it is still up nearly 23% so far this year.

Morgan Stanley Asia (Singapore) Pte bought 5.42 million shares of Paytm at Rs. 640 on Friday, the data showed.

It was not immediately clear why Alibaba sold the stake. Paytm and Alibaba did not immediately respond to requests for comment from Reuters.

In January, Alibaba sold a 3.1% stake in the company through an overall deal worth $125 million (almost Rs. 1,030 crore). Before that, the Chinese firm held a 6.26% stake in Paytm.

Paytm, which is also backed by Chinese group Ant and Japanese group SoftBank, has been under pressure to become profitable since its dismal listing in November 2021.

The stock is down around 70% since listing and has fallen 60% in 2022.

Earlier this week, Macquarie Research doubled down on the stock to “outperform” it from “underperform”, and raise the price target by around 80% to Rs. 800.

“Perhaps the final bear on the sell side action, we are changing our minds and doubling down on PaytM upgrade to outperform,” said Macquarie analyst Suresh Ganapathy.

“We are seeing a very visible shift in management’s approach to generating earnings, as evidenced by the recently released core EBIDTA profitability. We previously expected losses to continue, but at the current pace of revenue and operating leverage, we expect book earnings to be generated by FY26.”

© Thomson Reuters 2023