• Paytm shares have declined 8.8% following the sale of 19.20 million shares.
• The likely seller in the Paytm block deal is Alibaba Group affiliate Ant Financial.
• The recent decline in Paytm shares marks the steepest plunge since November 22nd.
Paytm, a digital payments and financial services platform, has seen its stock decline markedly after a shareholder offloaded 19.20 million shares. On Thursday, Paytm shares suffered an 8.8% decline following a series of block deals recorded by parent One97 Communications Ltd. It is believed that the likely seller in the Paytm block deal is Alibaba Group affiliate Ant Financial.
Reports state that the monetary value of the recent sale is around $125 million and Morgan Stanley (NYSE: MS) reportedly advised Alibaba on the deal. The company’s stock was trading at Rs 528 a share as of press time and it was trading down 5% from its previous close on the Bombay Stock Exchange (BSE). As of September last year, Ant Financial held 164.42 million shares, or a 24.88% stake, in Paytm.
The recent decline in Paytm shares marks the steepest plunge since November 22nd. Before this development, the company’s stock had accrued 15% since December 26th. Paytm had been trading higher in the past few weeks and the stock had seen a 15% jump since December 26th.
Analysts have attributed the decline in stock market to the sale of Paytm shares. According to reports, the sale of 19.20 million shares has created a supply shock in the markets, leading to the sharp decline in Paytm’s stock. While this has had a negative impact in the short-term, the long-term outlook for the company remains positive.
Paytm has been one of the leading digital payment platforms in India, and the company has been expanding its offerings in the financial services space. The company is focusing on diversifying its business and enabling financial inclusion with the help of technology. The recent decline in Paytm’s stock is unlikely to affect the long-term prospects of the company.