According to a report, China’s Alibaba Group, one of Paytm’s early investors, is thought to have sold a 3.4% interest in the FinTech company today to reduce its ownership to zero.
One97 Communications, the parent company of Paytm, changed hands in a block transaction today in which Chinese giant Alibaba sold all of its shares for 3.4% ownership, according to ANI. After the block transaction, the shares dropped by 9%, reaching a day low of Rs 646.
At the conclusion of the December quarter, Alibaba owned 6.26% of Paytm, and in January, it sold around 3% of its ownership on the open market.
Alibaba has been selling shares in publicly traded new-age technology businesses in India as the value of its investments has been rapidly declining. Earlier in November, the Chinese multinational sold a 3% share in online meal delivery aggregator Zomato.
Paytm’s recent surge after it revealed operating profitability for the December quarter was cut short by today’s block transaction by Alibaba.
The new-age company’s third-quarter net loss decreased from Rs 779 crore to Rs 392 crore. “With our focus on growth and keeping a tight vigil on operational risk and compliances, I am very confident that we will soon achieve our next milestone of becoming a free cash flow generating company,” Paytm CEO Vijay Shekhar Sharma had said after the announcement of the quarterly results last week.
Shares of Paytm, which earlier month launched a Rs 850 crore share repurchase scheme, have already fallen by around 70% from its Rs 2,150 IPO issue price. The stock has increased by almost 19% during the past five days, though.
According to Trendlyne data, Paytm now has 8 buy recommendations out of the 11 analysts that follow the stock, with an average target price of Rs 915, indicating a potential upside of more than 34%.
Even Macquarie, renowned for having negative opinions about Paytm’s future prospects, was impressed by the quarterly financial report card. The stock received a twofold upgrade from the international brokerage company, which also increased its target price by 80% to Rs 800.
“Our view at Rs 2,150 is different from our view when the stock is priced around Rs 600. Since our last target price cut, Paytm has positively surprised on the distribution of financial services revenue by a wide margin and has also managed to control overall expenses and charges,” Macquarie analysts Suresh Ganapathy and Param Subramanian said.
