Alibaba to Reduce Its Ownership of Paytm by 50% Amid Falling Stock Prices

One of Paytm's early backers, a unit of Alibaba Group Holding Ltd., has sold a 3% stake in the Indian fintech firm, according to people familiar with the matter. This marks a partial exit for Alibaba from Paytm.
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, according to people familiar with the matter who asked not to be named because the information regarding the seller is not public yet.
‍
Since its much-hyped trading debut in November 2021, the stock has struggled. This was India’s biggest initial public offering at the time, raising $2.5 billion. SoftBank Group Corp., another early investor, lowered its stake in the firm in November after a lockup on its shares ended.
The company has announced an ambitious plan to become profitable on an adjusted ebitda basis by September this year. To support this goal, the company will be spending $103 million to buy back some of its shares. This move is aimed at supporting the company's struggling stock price. Shares of Paytm gained for a record nine straight sessions before Thursday's selloff.
‍
A Paytm representative declined to comment when asked about Alibaba's stake in the company. Alibaba.com Hong Kong Ltd. held a 6.3% stake in Paytm as of Sept. 30, while SoftBank and Antfin Singapore Holding Pte Ltd. own about 17% and 25%, respectively. Alibaba did not immediately respond to an email seeking comment.
According to Avinash Gorakshakar, head of research at local brokerage Profitmart Securities Pvt., it appears that Alibaba is looking to exit the Indian market, having sold off its stakes in major investments such as Zomato. Gorakshakar notes that Paytm is on the fast track to profitability and has been delivering strong business updates, suggesting that it may be a better bet for investors going forward.
‍
In India, some tech stars are resorting to odd tactics to try to stem the stock slump. For example, one company is offering employees a bonus if they can convince their friends and family to buy shares.
Paytm plans to buy back $103 million in stock after the company's shares plunged following its initial public offering (IPO). The move is aimed at boosting investor confidence in the Indian e-commerce and payments firm. Paytm's stock has lost nearly a third of its value since debuting on the New York Stock Exchange in late November.
‍
Paytm, India's largest digital payments company, has seen its shares slump by 75% since its initial public offering (IPO) in late October, making it the worst-performing large IPO globally in the past decade.Founded in 2010, Paytm started out as a mobile recharge and bill payment platform before expanding into other areas such as e-commerce, payments bank and financial services. It was valued at around $16 billion at the time of its IPO.However, since going public, the company's shares have fallen sharply, with investors citing concerns over its high valuation and lack of profitability. Paytm has reported losses of nearly $1.6 billion in the last financial year.Paytm's 75% share price slump since its IPO makes it the worst-performing large IPO globally in the past decade, according to data from Dealogic.Founded in 2010, Paytm started out as a mobile recharge and bill payment platform before expanding into other areas such as e-commerce, payments bank and financial services. It was valued at around $16 billion at the time of its IPO.However, since going public, the company's shares have fallen sharply, with investors citing concerns over its high valuation and lack of profitability. Paytm has reported losses of nearly $1.6 billion in the last financial year.