Big blow to Paytm! Warren Buffet offloads entire stake in homegrown payments app | Details | Companies News
Warren Buffet has slashed his cuts Paytm stake
New Delhi: The ‘Oracle of Omaha’ Warren Buffet has offloaded his entire stake in Vijay Shekhar Sharma-founded payments company Paytm at a price of Rs 877.2 apiece. Buffet-led Berkshire Hathaway’s international arm BH International Holdings sold 1.56 crore stocks for a realisation of Rs 1,370 crore. The holdings equalled a 2.46 per cent stake in Paytm.
Paytm’s stock closed 3.08 per cent lower at Rs 895 apiece on the NSE on Friday. It opened at Rs 920 on Friday. To be sure, Paytm’s stock price has recovered over 68 per cent this year.
When did Berkshire Hathaway purchase Paytm stake?
Berkshire Hathaway purchased its stake in Paytm for nearly Rs 2,2000 crore in 2018 at a valuation fo $10-12 billion. This marked the standalone investment by Buffet in India. In 2021, Berkshire Hathaway’s investment manager Todd Combs stated that he had been “impressed by Paytm”. He expressed excitement about participating in the payments app’s growth story “as it looks ti transform payments and financial services in India.”
On Friday, the company sold its stake at Rs 895 crore to:
- Copthall Mauritius Investment bought 1.19 per cent
- Ghisallo Master Fund bought 0.67 per cent
Alibaba and SoftBank also exit Paytm
Prior to Buffet, Jack Ma-founded Alibaba Group and affiliate Ant Financial shed their stake in the payments company. They jointly offloaded a 3.4 per cent stale priced at Rs 1.378 crore in One97 Communications, the parent company of Paytm. Alibaba exited the company at Rs 642.74 per share in February 2023. In July SoftBank cut its stake in Paytm by 2 per cent to less than 10 per cent, picketing $180-200 million in the process. In February and May, the Japanese conglomerate sold a 2.07 per cent stake in Paytm through the open market.
Paytm under RBI lens
The Reserve Bank of India in October 2023 fined Paytm Payments Bank for failing to report a cybersecurity breach in a timely fashion, Paytm was fined Rs 5.29 crore by the watchdog for being in non-compliance with KYC rules. RBI had also banned Paytm Payments Bank from onboarding new customers since it was in non-compliance with KYC regulations.
