Alibaba, a Chinese company, sold its remaining 3.3% direct share in One97 Communications, a fintech company that runs under the Paytm brand, in a block transaction on Friday. According to data from the NSE, it sold more than 2.14 billion shares at an average cost of 642.74. The Chinese company would have received roughly Rs 1,380 crore for this.
According to Paytm’s stock structure as of December 2022, Alibaba owned 6.26% of the company. It sold a 3% share in this in January, and the rest was sold on Friday. A little over 25% of Paytm is still owned by Alibaba through its affiliate company Ant Financial. One of the first investors in the fintech startup was the Chinese corporation formed by billionaire Jack Ma.
According to NSE statistics, Morgan Stanley Asia (Singapore) purchased nearly 54 lakh shares on Paytm at an average cost of Rs 640. In a subsequent block transaction, it sold more than 5 lakh shares for Rs 667.66. Alibaba’s exit comes only days after Paytm announced its first-ever quarterly operational profit as a publicly traded company, sparking a 36% price increase in just 4 sessions. The stock, however, came under intense selling pressure on Friday, closing at Rs 651, down 7.8% from its NSE finish the day before.
Shares of Paytm are still trading below their Rs 2,150 per share initial public offering (IPO) price. The stock has lost roughly 60% since its launch in November 2021 as a result of valuation worries. On February 3, Paytm reported that it had surpassed its goal of operating profitability, with EBITDA before ESOP costs reaching Rs 31 crore, much ahead of its original target date of September 2023.
Paytm’s founder and CEO, Vijay Shekhar Sharma, claimed that they reached this milestone while remaining focused on growth possibilities and closely monitoring risk factors and compliances. Free cash flow generation will be the next significant achievement for Paytm, according to Sharma.
“With our focus on growth and keeping a tight vigil on operational risk and compliances, I am confident we will soon achieve our next milestone of becoming a free cash flow generating company,” he said.
