Shares of One97 Communications Limited (OCL), the parent company of Paytm, one of India’s leading fintech companies, took a hit on Thursday. The stock price of Paytm nosedived nearly 9% during intraday trade to Rs 528 per share, but managed to recover to settle 6.43% lower at Rs 542.25.
The reason for the sudden drop in Paytm’s share price was the news that China’s Alibaba Group had sold a 3.1% stake in the company through a block deal. The total value of the stake sold was $125 million, as reported by a source to Reuters. It should be noted that Alibaba held a 6.26% stake in Paytm as of September end and sold the stake at Rs 536.95 per share.
It was also revealed that financial giant Morgan Stanley had advised Alibaba on the deal, however, neither of them have made any official comments on the matter.
This is the first time in 10 days that Paytm’s shares have fallen. A few days ago, Paytm’s shares had risen after it reported a strong business update for the quarter ended December. Despite this, the company’s shares continue to trade lower than its original listing price and ended 2022 with a 60% loss. The company had announced a share buyback last month, but this has not prevented the stock from falling.
Paytm’s parent company, OCL, got listed in 2021 in what was India’s biggest IPO at the time. Since then, the company’s stock has been on a downward trend as investors raised concerns over the company’s monetization and profitability plans.