Paytm Shares Experience Significant Drop

Shares of One97 Communications Ltd, the parent company of Paytm, witnessed a sharp decline of 5 per cent, hitting a day's low of Rs 823.10 on the BSE during early trade on Tuesday. This downturn followed reports of Ant Financial, the fintech arm of China's Alibaba Group, selling a 4.1 per cent stake in the company through a block deal.

Details of the Block Deal

At 01.30pm, Paytm shares were trading at Rs 849.35 on the BSE. Although the identities of the buyers and sellers remain undisclosed, sources indicate that Ant Financial sold approximately 1.7 crore shares, valued at around Rs 2,200 crore. The shares were offered at a floor price of Rs 809.70 each, marking a 6.4 per cent discount to Paytm's closing price on Monday.

Ant Group's Reduced Stake

Previously holding a 9.85 per cent stake in One97 Communications, Ant Group's share is expected to drop below 6 per cent post this sale. Investment banking giants Goldman Sachs (India) Securities Pvt Ltd and Citigroup Global Markets India Pvt Ltd facilitated this transaction as placement agents.

Paytm's Financial Challenges

The company reported a consolidated net loss of Rs 540 crore for the fourth quarter of FY25, slightly improved from the previous year's Rs 550 crore loss. Adjusting for exceptional items, the net loss significantly narrowed to Rs 23 crore, indicating operational improvements.

Strategic Moves by Chinese Investors

This sale is part of a broader trend of Chinese investors reducing their stakes in Indian companies, influenced by regulatory and geopolitical factors. Alibaba had completely exited Paytm in 2023, with Ant Group now following suit by gradually decreasing its investment.