Shares of One97 Communications Ltd, owner of Paytm, declined further in the opening hours on Friday, a day after it saw a series of block deals. According to NSE data, China's Alibaba group has sold around 3 percent stake in the company for Rs 1,031 crore through a block deal.
Alibaba.com sold 19.2 million shares at Rs 536.95 apiece. While Morgan Stanley Asia bought 5.5 million shares, Ghisallo Master Fund picked up 4.98 million. There are no details so far on the buyers for the rest of the shares.
Alibaba group firm Ant Financial, however, has not diluted its stake in Paytm and continues to hold around 25 percent in the company. Alibaba held 6.26 percent stake in the firm as of September 2022.
The stock fell 1.7 percent in the opening to Rs 533 a share on Friday. On Thursday, it dropped as much as 9 percent after the deal. It had traded in the green in 12 out of the last 14 sessions since December 26 and gained 15 percent in this period.
Alibaba had earlier sold shares in BigBasket and Zomato. In November, Softbank group sold 29 million shares of Paytm or 4.5 percent stake worth around $200 million through a block deal.
According to Goldman Sachs calculations, Antfin Netherlands Holding had acquired shares between 2015 and 2019 at an average cost of Rs 300 per unit. It had invested in Paytm in 2015 at an average cost of acquisition of Rs 330 and had a 6.26 percent stake as of September-end.
On January 9, Paytm reported to exchanges that it disbursed 3.7 million loans worth Rs 3,665 crore in December, up 330 percent on-year. For the December quarter, its total disbursements jumped 357 percent to Rs 9,958 crore. Monthly transacting users jumped 32 percent to 85 million in December from 65 million a year ago. Gross merchandise value processed through the platform saw a 38 percent growth year-on-year in December to Rs 3.64 lakh crore.
Read: Morgan Stanley, Ghisallo Master Fund buy Paytm shares worth Rs 560.2 crore
The digital payments company also added one million payment devices during October-December and the number of merchants paying subscription for payment devices touched 5.8 million as of December 2022.
The company's consumer engagement was at its highest on Paytm Super App with average monthly transacting users at 85 million for the quarter ended December 2022, up 32 percent on a yearly basis.
Paytm board in December approved buyback of shares worth Rs 850 crore ($103 million) through the open market route. The number of shares bought back will be 10.5 million at the maximum buyback price of Rs 810, representing 1.6 percent of the paid-up share capital. Paytm has $1.1 billion in cash as of September 2022 and $127 million outlay of cash for buyback.
Read: Paytm buyback: The good, the bad, and the ugly
"We expect it to burn $33 million over the next three quarters before turning Adj Ebitda breakeven in 2QFY24. We expect the buyback announcement at a 50 percent premium to provide support to the stock price in the near term. The reduction in cash because of the buyback offsets the reduction in share count thereby keeping our price target unchanged. Reiterate Overweight," said JPMorgan in its December 14 note to investors.
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