China’s Alibaba Group has reportedly sold half its take in Indian payments firm Paytm.
The company sold its 3.1% stake in Paytm for $125 million via a block deal on Thursday (Jan. 12), Reuters reported, citing a source with direct knowledge of the sale. Shares in Paytm fell as much as 8.8%, the report noted.
Alibaba, which owned a 6.26% stake in Paytm as of the end of September, sold its stake at 536.95 rupees apiece, the source said.
The sale follows a rocky year for Paytm, which went public in 2021. Paytm’s parent company, One97 Communications, raised $2.5 billion on what was India’s largest-ever initial public offering (IPO), only to see shares fall 25% on the opening day of trading.
Last year saw the company audited by the Reserve Bank of India over allegations it engaged in data sharing with organizations in China and failed to establish proper know-your-customer documentation. Paytm has denied these claims.
Around the same time, the central bank barred Paytm’s Payments Bank from adding new customers pending an audit of its IT systems.
In August, the company saw its shares fall when proxy advisory firm Institutional Investor Advisory Services India Ltd. (IIAS) urged shareholders to depose Paytm’s then-CEO and founder Vijay Shekhar Sharma.
IIAS argued it was concerned about Sharma’s ability to get the company to profitability.
The company’s latest news comes a few weeks after competitor PhonePe officially parted ways with parent company Flipkart.
Flipkart acquired PhonePe in 2016, allowing the digital company to give more than 35 million merchants in India a way to digitize their checkout. As part of the separation agreement, Walmart will stay the majority shareholder for both Flipkart and PhonePe.
PhonePe also recently announced it was looking to raise $1 billion for its financial super app. The company’s separation from Flipkart will allow the brand to continue raising funds from investors looking to strengthen its plans to move into new financial areas.
In other recent payments news from India, the National Payments Corporation of India (NPCI) said this week it is widening access to the Unified Payments Interface (UPI) to non-resident Indians in countries that include Singapore, the U.K., Australia, Canada and the U.S.
“There has been customer demand in the ecosystem to enable UPI for their [non-resident] accounts …[to] experience the seamless and instant journey of UPI,” the NPCI wrote.
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