Is Alibaba exiting India?

There was a big movement in Paytm's stock on Tuesday as a block deal took place where 2,59,930 shares were sold at Rs535.90 worth 13.93 crore rupees. Multiple sources have confirmed that Chinese group Alibaba is behind the deal, selling up to 3.1 per cent of its total equity of about 6 per cent. Alibaba seems to be making an exit from India as it has sold shares in other investments such as BigBasket and Zomato. The sources added that Ant Financial is not going to sell anytime soon.

This could come as a good news for investors, with Chinese shareholding reducing their stake it will benefit the company in their FDI aspect. In fact, immediately after the block deal (where the share price fell to Rs 534), it soon recovered to Rs 548.

Paytm's shares had been rising continuously for the past few days, after there were several good news floating about the company. Its associate Paytm Payments Bank has received RBI approval to appoint Surinder Chawla as its Managing Director and CEO.

The company had posted a strong operating performance update for Q3FY23.The Paytm Super App continues to see growing consumer engagement with the average MTU for the quarter ended December 2022 at 85 million, registering a growth of 32 per cent YoY. The total merchant GMV processed through the platform for the quarter ended December 2022 aggregated to Rs 3.46 lakh cr ($42 billion), marking a YoY growth of 38 per cent. The number of loans grew 117 per cent YoY to 3.7 million for the month of December, and 137 per cent YoY to 10.5 million cumulative loans for the three months ended December 2022. As a result, total disbursements for three months ended December 2022 was Rs 9,958 crore, a growth of 357 per cent YoY.

Talking to Bizz Buzz, Avinash Gorakshakar, Head Research, Profitmart Securities, said: "Alibaba selling shares in Paytm could be good news for shareholders as it reflects that Chinese shareholding is reducing in the company. This would benefit them in FDI and as the company is already on path to profitability, this will further allay investor concerns."

Alibaba seems to be on the exit move from India as it has sold shares in its major investments like BigBasket, Zomato and Paytm. This is a positive for shareholders, as it clears many regulatory paths. In the case of Paytm, the company is on the fast track to profitability, and has been delivering good business updates, he added. Paytm continues to be on track for its profitability plans, with robust revenue growth driven by its strong business model.