Berkshire Hathaway Sells Paytm Stake at a Loss

In a significant move, Billionaire Warren Buffett's Berkshire Hathaway Inc. has sold its entire 2.46 percent stake in Paytm, India's leading digital payments company, for Rs 1,371 crore through an open market transaction. This sale marks a loss of approximately 31 percent per share for the investment firm.

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Acquisition and Sale Details

In an official document, it was revealed that Berkshire Hathaway had earlier acquired a 2.6 percent stake in Paytm at Rs 1,279.7 per share, amounting to an aggregate value of Rs 2,179 crore. However, on Friday, the shares were disposed of at an average price of Rs 877.29 apiece, resulting in a transaction value of Rs 1,370.63 crore, as per data available on the National Stock Exchange (NSE).

A comparison of the purchase and sale prices indicates a loss of 31 percent per share for Berkshire Hathaway.

Transaction Details

Through its affiliate BH International Holdings, Berkshire Hathaway sold more than 1.56 crore shares of Paytm's parent company, One97 Communications, on the NSE. According to the bulk deal data available with the NSE, BH International Holdings offloaded 1,56,23,529 shares, or a 2.46 percent stake, in Noida-based Paytm.

At the end of the September quarter, BH International Holdings held a 2.46 percent stake in Paytm, as per shareholding data available with the BSE. It is not immediately clear when the entity offloaded the remaining 0.14 percent stake.

New Investors in Paytm

On Friday, Copthall Mauritius Investment picked up 75,75,529 shares, and Ghisallo Master Fund LP acquired 42.75 lakh shares of Paytm, representing 1.19 percent and 0.67 percent stakes, respectively. These shares were purchased at an average price of Rs 877.20 per piece, bringing the aggregate deal value to Rs 1,039.52 crore.

Details regarding the other buyers could not be ascertained at this time.

Stock Performance and Financial Results

On Friday, shares of One97 Communications, the parent company of Paytm, declined 3.08 percent to close at Rs 895 apiece on the NSE. Despite this decline, the fintech company reported a narrowing of its consolidated loss to Rs 291.7 crore in the second quarter of the current fiscal, compared to a loss of Rs 571.5 crore in the same period of the previous year.

The company's consolidated revenue from operations witnessed a significant increase of approximately 32 percent, rising from Rs 1,914 crore in the year-ago period to Rs 2,518.6 crore during the quarter.

The sale of Berkshire Hathaway's entire stake in Paytm marks a significant development in the Indian fintech industry. Despite incurring a loss on its investment, the transaction highlights the continued interest and participation of global investors in India's rapidly growing digital payments landscape. As Paytm and other fintech companies navigate the evolving market dynamics, their ability to drive financial inclusion and profitability will be key factors to watch in the coming quarters.