Berkshire Hathaway divested from One97 Communications, the parent company of Paytm, on Friday, incurring a loss of approximately 40 percent on the notable investment made over five years ago.
In 2018, Berkshire Hathaway invested Rs 2,179 crore ($261 million) in Paytm, securing approximately a 3% stake. Following the IPO, the company divested its shares, totaling Rs 1,315 crore ($158 million). The average purchase price for Paytm's shares by Berkshire was Rs 1,279 per share, while the current trading price has fallen below Rs 900.
During the 2021 IPO, Berkshire realized a profit by selling shares worth Rs 301 crore at a share price of Rs 2,150 per share. However, the remaining shares were sold on Friday for Rs 1,014 crore, at Rs 877 per unit.
Paytm marked Berkshire Hathaway's inaugural direct startup investment in India, a deal that received widespread celebration within the local startup ecosystem. In addition to Berkshire Hathaway, other notable investors in Paytm included Alibaba, SoftBank, and T Rowe Price.
According to a report of Mint, During One97’s IPO, BH International had pocketed Rs 301.70 crore, selling at Rs 2,150 per share. Put together, the company has made a total of Rs 1,672.7 crore from its investment in Paytm, essentially booking a loss of about Rs 507 crore
Following a significant decline in its stock price upon listing, Paytm has exhibited strong performance on the stock exchanges. Over the past year, the stock has experienced a notable increase of 104%, surpassing the 8% rise observed in the Nifty50 during the same period.
It said its revenue from operations during the same period grew 32% on a year-on-year (YoY) basis to Rs 2,519 crore. Earnings before interest, tax, depreciation and amortization or Ebitda for the quarter stood at Rs 153 crore.