Ant Group divests 4% stake in Paytm amid strategic portfolio shift

By Gloria Methri

Ant Group, the financial technology arm of China’s Alibaba Group, has sold a 4% stake in Indian digital payments company Paytm, raising approximately $246 million (INR 2,103 crore) through a block trade.

The transaction involved the sale of 25.5 million shares at INR 823.10 each, representing a 5% discount to Paytm’s closing price of INR 866.05 on the Bombay Stock Exchange (BSE) prior to the deal. Investment banks Goldman Sachs and Citigroup facilitated the sale, with Goldman Sachs acquiring 3.73 million shares worth INR 307 crore.

This move follows a series of major shareholder withdrawals from Paytm in recent years. According to filings with Indian stock exchanges, among those who have reduced or ended their holdings are Warren Buffett’s Berkshire Hathaway and Japan’s SoftBank Group.

Following this divestment, Ant Group’s stake in Paytm has decreased from 9.85% to 5.85%, according to BSE filings. This move continues Ant Group’s gradual reduction of its holdings in Paytm, including a previous sale of a 10.3% stake to Paytm founder Vijay Shekhar Sharma in August 2023.

In response to the sale, Paytm’s shares experienced a 5% decline, reaching a low of INR 823.10 during early trading on the BSE. Despite this, the company’s market capitalisation remains robust at approximately INR 54,634 crore ($6.4 billion).

Paytm’s financial performance has shown signs of improvement. Revenue from operations decreased 16% year-on-year to INR 2,267 crore in Q4 FY24, and net losses significantly reduced by 96% to INR 23 crore during the same period.

As Ant Group continues to adjust its investment portfolio, the reduction in its stake may influence Paytm’s strategic direction and investor sentiment in the evolving Indian FinTech landscape.