China’s Alibaba Group sold a 3.1% stake in Indian digital payments firm Paytm for a total of $125 million through a block deal. Shares of the company fell as much as 8.8% to 528 rupees in afternoon trading, and was last down 5.8%. Alibaba, which held a 6.26% stake in Paytm as of end-September, sold the stake at 536.95 rupees apiece. Paytm’s stock has risen about 9% this year up to last close, after reporting strong preliminary figures for the third quarter. It closed 2022 with a 60% loss, despite the company announcing a share buyback in December. In November last year, Softbank Group Corp sold a 4.5% stake in the e-payments firm worth $200 million. SoftBank had a 17.5% stake in Paytm as of Sept. 30.
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Formally known as One97 Communications, Paytm listed in 2021 after a mega $2.5 billion initial public offer (IPO). Since then, the stock has plunged around 75% from its IPO offer price as investors started questioning the company’s monetization plans amid worries about sky-high valuations of tech companies and fears of a global economic recession.
Alibaba seems to be making an exit from India as it has already sold certain shares in other investments such as BigBasket and Zomato. Paytm is the latest to see a stake sale from this e-commerce giant.
Block Deal is a single transaction between two institutional players or two parties of a minimum quantity of 5 lakh shares or at least Rs. 5 Crores in value. This usually happens at the start of trading hours for about 35 minutes through a separate trading window. It has the following features:
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