Alibaba sells a $125 million stake in Paytm in a block deal

Through a block deal, China’s Alibaba Group sold a 3.1% stake in Paytm, an Indian digital payments firm, for a total of $125 million.

Through a block deal, China’s Alibaba Group sold a 3.1% stake in Indian digital payments company Paytm for a total of $125 million. In afternoon trading, the price of the company’s shares dropped as much as 8.8% to 528 rupees; they last traded down 5.8%. Alibaba sold its 6.26% ownership of Paytm at a price of 536.95 Indian rupees per share. Following the release of positive third-quarter preliminary results, the price of Paytm’s stock has increased by about 9% year to date as of the last close. Despite the company announcing a share buyback in December, it ended 2022 with a 60% loss.

Softbank Group Corp. sold a 4.5% stake in the e-payments company for $200 million in November of last year. As of September 30, SoftBank owned a 17.5% stake in Paytm.

The Paytm IPO Journey is as follows.

Paytm, formerly One97 Communications went public in 2021 following a massive $2.5 billion IPO (IPO). Since then, the stock has lost about 75% of its value from the IPO offer price as investors began to doubt the company’s monetization strategies amid concerns about the exorbitant valuations of tech firms and concerns about a possible global economic recession.

The RBI has approved the appointment of Surinder Chawla as the Managing Director and CEO of Paytm Payments Bank

The RBI has approved the appointment of Surinder Chawla as the Managing Director and CEO of Paytm Payments Bank. However, the RBI still forbids Paytm Payments Bank from accepting new clients. Chawla previously worked for RBL Bank, where he held the position of Head – Branch Banking and was responsible for growing the CASA base, fee income, and cross-selling across channels. The latest appointment, according to the company’s regulatory filing, is part of PPBL’s ongoing efforts to strengthen its leadership team, improve its technological capabilities, and promote financial inclusion in the nation.

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Surinder Chawla’s career includes:

Chawla has over 28 years of experience in retail banking with companies like HDFC Bank, RBL Bank, ABN Amro Bank, and Standard Chartered Bank. He comes to PPBL from RBL Bank, where he oversaw branch banking and was responsible for increasing the number of Current Account Savings Accounts (CASA), fee income, and cross-selling opportunities.

Prior to joining RBL Bank in 2013, Chawla worked at HDFC Bank for about 12 years, rising to the position of head of the retail liabilities product group. At various points in his career, Chawla, a senior executive vice president at HDFC Bank, served as the region’s chief executive officer for the Southern, Eastern, and Northern regions.

Alibaba Withdraws From Indian Startups

Given that it has already sold some of its stock in other investments like BigBasket and Zomato, Alibaba appears to be leaving India. The e-commerce behemoth’s most recent stake sale was to Paytm.

What is a ‘Block Deal’

A block deal is a single transaction involving at least 5 lakh shares or Rs. 5 crores in value between two institutional players or two parties. This is usually done for about 35 minutes at the start of trading hours through a separate trading window. It has the following characteristics:

The Order consists of the purchase of the greater of Rs. 5 crores or a minimum of 5 lakh equity shares.

As “Block Deal” orders cannot be reversed or even squared off, all trades should be delivered.
The share’s real price should vary from +1% to -1% of its current market price.