In a surprising move Berkshire Hathaway has offloaded its entire stake in Paytm’s parent company One97 Communications. This marks a substantial 40% loss on its initial investment made over five years ago.
Back in 2018 Berkshire Hathaway made a significant bet on Paytm injecting around $260 million to acquire a 3% stake in the financial services startup. The valuation at the time stood at an impressive $10 billion. This investment marked Berkshire Hathaway’s maiden direct foray into the Indian startup landscape.
Despite selling a portion of its Paytm stake in 2021 for a profit of $36 million. The investment giant made the decision to part ways with the remaining shares on Friday. The sale amounting to $121.6 million was disclosed by the Indian stock exchange. In total Berkshire Hathaway secured a return of $157 million on its initial investment.
Paytm, which made waves with its IPO debut in 2021 at $25.8 per share. Paytm faced a downturn seeing its shares plummet to as low as $5.58 a year ago. The Indian fintech company has since experienced a remarkable recovery closing at $10.73 per share on Friday. This resurgence is attributed to robust revenue growth and improved financial performance in recent quarters.
Berkshire Hathaway’s decision to exit Paytm at a loss underscores the unpredictable nature of the market. Despite positive trajectory witnessed by the Indian firm in recent times. Observers are keenly watching to see how this move might impact Berkshire Hathaway’s future investment strategy and particularly in the dynamic landscape of Indian startups.
