[Update] Paytm Slumps Over 9% Intraday As Alibaba Singapore Sells Remaining 3.31% Stake

Update | February 10, 9:00 PM

Shares of Paytm plunged over 9% to INR 646 during the intraday trade on the BSE on Friday (February 10), reversing its sharp rally in the previous four sessions in the week after Alibaba.Com Singapore E-Commerce Private Limited exited the company by selling the rest of its 3.31% stake in a block deal worth INR 1,377.5 Cr.

Alibaba.Com Singapore E-Commerce Private Limited held over 4 Cr shares, or 6.26% stake in Paytm at the end of December quarter of 2022. The Chinese ecommerce giant had offloaded 1.9 Cr shares of around 2.96% stake in the company last month.

Morgan Stanley Asia brought 54 Lakh Paytm shares after Alibaba offloaded the shares.

Alibaba-backed Antfin Netherlands Holding still holds 16.1 Cr shares, or 24.86% stake in the fintech startup.

Paytm shares ended Friday’s session down 8.7% at INR 650.2 on BSE.

Original Story| February 10, 3:20 PM

Shares of Paytm slumped over 9% to INR 646 during the intraday trade on the BSE on Friday (February 10), reversing its sharp rally in the previous four sessions in the week.

The decline came amid reports that around 2.1 Cr shares changed hands today via a block deal. As per a report by CNBC TV18, 3.4% of the company’s equity was a part of the deal.

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Later, news agency ANI reported that Alibaba sold its entire stake in Paytm through a block deal today. However, Inc42 could not independently verify this. 

It is pertinent to note that Alibaba.Com Singapore E-Commerce Private Limited offloaded 1.9 Cr shares worth INR 1,030.9 Cr in a bulk deal last month. Alibaba held a total of 31.12% stake in Paytm via its two arms at the end of December quarter of 2022.

While Alibaba’s Antfin Netherlands Holding held 16.1 Cr shares, or 24.86% stake, Alibaba.Com Singapore E-Commerce Private Limited held over 4 Cr shares, or 6.26% stake in the company.

It must be noted that Paytm shares rallied over 23% in four consecutive sessions this week after the company reported upbeat Q3 FY23 results last Friday. It also said that it achieved EBITDA positivity minus ESOP cost during the quarter.

Besides the much-awaited commentary on profitability, Paytm also reported over 41% year-on-year (YoY) increase in operating revenue to INR 2,062 Cr in the December quarter and about a 50% YoY decline in net loss to INR 392.1 Cr. 

Also, in its operating performance report released earlier this week, Paytm said that it disbursed 3.9 Mn loans worth INR 3,928 Cr in January this year, which was a 103% and 327% surge, respectively, from the corresponding period last year.

Given the strong fundamentals, several brokerages also became more upbeat about Paytm stocks. Macquarie double upgraded Paytm to ‘outperform’ from a previous ‘underperform’ rating saying that the startup has “positively surprised” on the distribution of financial services revenue by a wide margin.

At least four brokerages including Macquarie, Goldman Sachs, Citigroup, and CLSA also increased their price targets on the company and most of them believe that its EBITDA positivity will sustain and improve in the forthcoming quarters.

Paytm was one of the worst-hit new-age tech stocks in 2022, falling over 60% during the year. Most analysts are bullish on the stock now due to the company achieving its EBITDA profitability target. 

However, several market experts earlier said that share offloading by major investors via block deals is expected to continue and it would remain a headwind for Paytm’s stock in the near term.

Shares of Paytm were trading over 8% lower at INR 653.6 on the BSE at 3.05 PM IST.