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Business News/ Markets / Stock Markets/  Softbank trims stake in Paytm, sells another 2% in a month
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Softbank trims stake in Paytm, sells another 2% in a month

SVF India Holdings, a SoftBank entity, has sold an additional 2% stake in Paytm through open market transactions, reducing its stake in the company to 5.01%.

Regarding financials, the company posted a good set of numbers for the December ending quarter, with its consolidated losses narrowing to ₹222 crore from ₹392 crore reported in the same period last year. (Bloomberg)Premium
Regarding financials, the company posted a good set of numbers for the December ending quarter, with its consolidated losses narrowing to 222 crore from 392 crore reported in the same period last year. (Bloomberg)

SoftBank entity SVF India Holdings sold an additional stake in One 97 Communications, the parent entity of the digital payment app Paytm. Softbank has been cutting its stake in the company over the last few quarters.

In the latest divestment, SVF India Holdings sold 12,706,807 equity shares, between December 19, 2023, and January 20, 2024, through open market transactions. Following this transaction, SVF India Holdings stake in the company now stands at 5.01%.

"SVF India Holdings (Cayman) Limited has disposed of an aggregate of 12,706,807 equity shares of One97 Communications Ltd in a series of disposals undertaken between December 19,2023 and January 20,2024, with the disposal on January 20,2024 breaching the 2% threshold specified in Regulations 29(2) of the Sebi Takeover regulations," the company said in an exchange filing on Tuesday. 

As of the end of Q3 FY24, foreign institutional investors (FIIs) collectively held a 63.7% stake in Paytm, marking an increase from 60.09% in Q2 FY24. Concurrently, domestic institutional investors (DIIs) also raised their stake during the third quarter of the current fiscal year, bringing their stake to 6.1%, up from 4.1% in the previous quarter (Q2FY24).

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On the other hand, retail investors reduced their stake in the company, with their ownership dropping to 30.2% in Q3 FY24 from 35% in Q2 FY24. Paytm's founder and CEO, Vijay Shekhar Sharma, holds a 19% stake in the company, including a 9.89% stake held through Antfin (Netherlands) Holding B.V.

Earlier in November 2023, Warren Buffett’s Berkshire Hathaway, or BH International, sold its entire 2.46% stake in the company, booking a loss of 507 crore on its initial investment made five years ago. At the current market price of 749 apiece, the stock has seen a decline of 65% from its IPO price of 2,150 per share.

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Q3FY24 Scorecard

Regarding financials, the company posted a good set of numbers for the December ending quarter (Q3FY24), with its consolidated losses narrowing to 222 crore from 392 crore reported in the same period last year.

It reported a rise in revenue by 38% to 2,850 crore in Q3, compared to 2,062 crore in the year-ago period. The payment business contributed significantly, generating revenue of 1,730 crore, reflecting a 45% YoY growth attributed to higher gross merchandise value (GMV) and increased subscription revenue.

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Marking a significant milestone, Paytm surpassed 100 million active customers for the first time in Q3 FY24 and is actively integrating artificial intelligence into its daily operations to enhance overall efficiency.

In response to Paytm's Q3 performance, global brokerage firm CLSA upgraded the stock from 'outperform' to 'buy,' along with raising the target price to 960 from 925.

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.

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Published: 24 Jan 2024, 02:17 PM IST
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