Last month, Alibaba sold 3.1% of its stake in India’s Paytm in a block deal. Now, the Chinese tech company has fully exited the fintech major and sold the entirety of its stock in Paytm, according to media reports.
While Alibaba and Paytm refrained from commenting on the matter, reports reveal that the Chinese giant fully exited the Indian digital payments firm after it sold its entire stake of 3.4% equity in Paytm. The block deal occurred on Friday, sending the recovering shares of Paytm back into a tumble. Paytm stock fell by as much as 9.3% to ₹640, although it later recovered a little to cross the ₹650 mark. At the time of writing this article, Paytm’s shares clocked a net fall of 7.82% to be currently priced at ₹650.75. Paytm’s shares had, in recent times, dropped by around 70% from its IPO issue price of ₹2,150. The last five days saw a mild reversal of its fortunes as its stocks rose by nearly 19%, but the sale of Alibaba’s direct stake in Paytm sent shares falling once again.
According to Refinitiv (which was later included in a Reuters report), over 22.8 million shares of Paytm, or about 3.5% of the company’s total share capital, changed hands in 15 blocks at a price between ₹655-690.25 as of 10:54 AM IST. Before Alibaba sold a stake of 3.1% in Paytm through the block deal worth $125 million last month, it had a total stake of 6.26% in the company. Besides Alibaba, its group firm Ant Financial continues to have a stake of nearly 25% in Paytm.
This development, while being an unpleasant one for Paytm, does not come as a big surprise. Recent times have seen Alibaba slowly but steadily make an exit from the Indian market as it continued to sell its stakes in its investments in Indian enterprises. The reason for the same is a simple one – the exits came amidst a steep drop in the value of its investments. Last year, the Chinese tech major sold a stake of 3% in food aggregator Zomato (which clocked a growth of 75% in revenue for the winter quarter and a widening of its net loss for the same period).
Paytm, for the final quarter of the previous year, saw its net loss narrow to ₹392 crores, while its revenue from operations jumped by 42% to reach ₹2062.2 crores for the same period.
