Paytm shares recovered partly on Monday after sinking nine percent on Friday after the Chinese e-commerce giant Alibaba offloaded its entire holding in the company. Paytm shares rose 4.4 percent to Rs 679 on the BSE, while Sensex and Nifty 50 fell half a percent.
The stake sale of Alibaba in Paytm's parent company One97 Communications, aggregated to nearly a 3.4 percent equity stake. The digital payments major witnessed a total of Rs 3,520 crore eroding from its market capitalisation in the previous session, per exchange data.
The exit comes days after Paytm posted its first-ever quarterly operating profit as a listed firm, nine months ahead of its own target. Alibaba had already slashed its holding in the Indian payments firm by 3.1 percent from 6.26 percent last month in January 2023.
Alibaba also appears to be exiting from other Indian companies as it sold its stakes in BigBasket and Zomato as well.
Paytm's founder Vijay Shekhar Sharma, on the sidelines of the World Economic Forum in January, told CNBC-TV18 that Alibaba was never a strategic shareholder for Paytm. Days prior to this, the Chinese internet giant had sold $125 million worth of shares in Paytm. Sharma said the company was not aware of the sale beforehand — and that it could have been planned better.
Last week, global brokerage firm Macquarie upgraded its rating on One 97 Communications from "Underperform" to “Outperform”. Macquarie raised the target price by 80 percent to Rs 800 from Rs 450 per share.
The brokerage noted that since its listing at Rs 2,150 in mid-November 2021, the Paytm stock is down 70 percent against a flat Nifty.
Macquarie has lowered its FY23–25E loss-per-share estimates by 18–72 percent and raised its target price to Rs 800 from Rs 450, driven by a substantial increase in revenue numbers and a roll-forward to December 2024 from December 2023-based valuation.
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