Mumbai:China's Alibaba Group sold a 3.1% stake in Indian digital payments firm Paytm for a total of $125 million through a block deal on Thursday, a source with direct knowledge of the matter told Reuters.

Shares of the company fell as much as 8.8% to 528 rupees in afternoon trading, and was last down 5.8% as of 3:00 p.m. IST.

Alibaba, which held a 6.26% stake in Paytm as of end-September, sold the stake at 536.95 rupees apiece, the source, who did not want to be named because he is not authorised to speak to media, said.

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Morgan Stanley advised Alibaba on the deal, the source added. Alibaba and Morgan Stanley did not immediately respond to Reuters' requests for comment.

Paytm's stock has risen about 9% this year up to last close, after reporting strong preliminary figures for the third quarter. It closed 2022 with a 60% loss, despite the company announcing a share buyback in December.

Formally known as One97 Communications, Paytm listed in 2021 after a mega $2.5 billion initial public offer (IPO).

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Since then, the stock has plunged around 75% from its IPO offer price as investors started questioning the company's monetization plans amid worries about sky-high valuations of tech companies and fears of a global economic recession.

In November last year, Softbank Group Corp sold a 4.5% stake in the e-payments firm worth $200 million. SoftBank had a 17.5% stake in Paytm as of Sept. 30.

 

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