Two of the biggest names in the industry, India’s Paytm and China’s e-commerce giant Alibaba, have parted ways in the news that could rock the world. China’s Alibaba has officially exited Paytm in a block deal where they have sold all their remaining shares worth US$167 Million in the current market valuation. While both Alibaba and Paytm have not yet commented on this news, we can only speculate why this decision was made. On the one hand, we can consider that Paytm is burning cash, and it is fair for early investors to take an exit whenever they want. However, it also tells others that Paytm might not be doing well and indicates to its Chinese investors that they should also exit the company.
However, it is also worth noting that Morgan Stanley bought 5.42 million shares of Paytm last week, per reports. This tells you that the current outlook of investors on the company is quite good, and there is nothing to worry about right now. Also, Macquarie analyst overturned their outlook for Paytm shares from “underperform” to “outperform” which also boosted their share prices on the markets the following day.
Another thing we need to tell you is that Paytm posted its first-ever quarterly operating profits as a listed firm 8 months earlier than expected. Currently, the stock price of Paytm stocks is around 650 INR, and Alibaba Group sold their stocks at INR 642 per share. It is also worth noting that a Macquarie analyst said, “We see a very visible change in approach of the management to deliver profits, as evidenced by core EBIDTA profitability reported recently. We were earlier expecting losses to continue but at current rate of revenues and operating leverage kicking in, we expect accounting profits to be delivered by FY26.”
We must tell you that the public listing or IPO of Paytm did not go well in the markets as the stocks kept on tumbling, but since then, and now that the company has posted quarterly profits, they are on the rise again. While the reason behind Alibaba’s exit from Paytm is not known yet, it could also be linked to Indo-China relations.
