In a surprising move, Warren Buffett’s Berkshire Hathaway has divested its entire stake in One 97 Communications, the parent company of Paytm, according to bulk deals data published by the National Stock Exchange. The transaction, which saw Berkshire Hathaway sell 2.46% of its stake, took place at an average price of Rs 877.2 per share, resulting in a loss of about Rs 507 crore.
The shares were picked up by Ghisallo Master Fund and Copthall Mauritius Investment, acquiring 42,75,000 and 75,75,529 shares, respectively. Berkshire Hathaway, through BH International, initially acquired the shares at an average cost of Rs 1,279.7 per share, investing Rs 2,179 crore in September 2018.
The recent exit comes as a surprise given that the stock of Paytm had been recovering. Earlier in the day, shares of Paytm saw a decline of 3.23%, closing at Rs 893. The IPO prospectus reveals that BH International had sold shares worth Rs 301.70 crore during the initial public offering (IPO) at Rs 2,150 per share. Including the latest transaction, Berkshire Hathaway has now earned a total of Rs 1,672.7 crore from its investment in Paytm.
Key pre-IPO investors, including SoftBank, have been steadily offloading their shares in Paytm as the stock has shown signs of recovery. The move by Berkshire Hathaway adds to the trend of prominent investors reducing their exposure to the digital payment giant, raising questions about the future prospects of the company in the eyes of institutional investors. Paytm, however, remains a significant player in the Indian fintech space, and the developments around its stock will be closely watched by industry experts and market analysts.