Paytm, Indian digital payments and financial services startup, had its shares fall about 9% on Thursday after a block sale that was due to be carried out by Chinese group Alibaba. This share sale by Alibaba may well be excellent news for investors because it boosts the company in terms of FDI. Paytm shares have been in the spotlight following the start of its 850 crore repurchase plans to achieve long-term value development.
Paytm shares closed at 542.25 on the BSE, down 37.25% or 6.43%. On Dalal Street, the stock has dropped by more than 8.8%, with an intraday low of 528.35 per share.
Alibaba seems to be exiting India since it has previously sold stakes in other investments such as BigBasket and Zomato. Paytm is the latest e-commerce company to sell a share.
“There was a major movement in Paytm’s stock today as a block trade took place where 2,59,930 shares were sold at 535.90 worth 13.93 crore rupees,”. In these reports, Alibaba is driving the sale, selling up to 3.1% of its overall equity of around 6%.
the sources also stated that Alibaba’s subsidiary firm, Ant Financial, will not be selling in Paytm anytime soon.
It further said, “This might be excellent news for investors, as Chinese shareholding is decreasing, which will assist the firm in terms of FDI. In reality, the share price quickly recovered to 548 following the block transaction (when it fell to 534).”
Paytm shares have risen significantly in recent days as a result of multiple positive stories about the firm. Prior to the block transaction, the company’s shares rose roughly 9% on Dalal Street from January 1-11.
Vijay Shekhar Sharma, Founder, CEO & MD of Paytm, tweeted, “Huge commitment by GOI Cabinet to push Digital Payments thru UPI and RuPay!,” adding, “The Digital India mission of our government will bring long-term benefits to our economy.”
Paytm shares have been assigned an ‘Equal-weight’ rating by Stanley, with a target price of $695 per share.