Berkshire Hathaway's investment in Paytm is a significant one. Berkshire Hathaway acquired a 3% stake in Paytm's parent company, One97 Communications, in 2019.
Paytm is a leading digital payments and financial services company in India. It has over 300 million registered users and offers a range of services including mobile payments, e-commerce, and digital banking.
Berkshire Hathaway's investment in Paytm is a strategic one, aimed at tapping into India's growing digital payments market.
Expand your knowledge: How Many Paytm Users in India
Berkshire Hathaway's Paytm Deal
Berkshire Hathaway invested $260 million for a 3% stake in Paytm in 2018, at a valuation of around $10 billion.
Warren Buffett's firm initiated the deal through Todd Combs, one of Buffett's portfolio managers, who saw potential in Paytm's growth and dominance in the Indian digital payments market.
The deal was reportedly pitched by Paytm's founder & CEO, Vijay Shekhar Sharma, with no paper or PowerPoint, according to India Times.
In 2021, Berkshire Hathaway sold shares worth ₹220 crore during Paytm's IPO.
Berkshire Hathaway sold its entire stake in Paytm for about ₹1,370 crore in a bulk deal, with a weighted average price of ₹877.29 per share.
The buyers of the stake include Copthall Mauritius Investment and Ghisallo Master Fund, which purchased 1.19% and 0.67% stake, respectively.
Berkshire Hathaway booked a loss of about ₹600 crore from the sale.
Here's a summary of the stake sale:
Berkshire Hathaway's exit from Paytm comes after a string of selldowns for the firm, including stake cuts by Japanese conglomerate SoftBank Group and the exit of China's Alibaba Group.
Berkshire Hathaway's Investment in Paytm
Berkshire Hathaway's Investment in Paytm was a significant move in 2018, with the firm investing $260 million for a 3% stake in Paytm at a valuation of around $10 billion.
Todd Combs, one of Warren Buffett's portfolio managers, initiated the deal, seeing potential in Paytm's growth and dominance in the Indian digital payments market.
The investment was a notable one, but it didn't quite pay off as expected, with Berkshire Hathaway recording a return of just $157 million five years later.
Vijay Shekhar Sharma, Paytm's founder and CEO, reportedly pitched the deal to Berkshire Hathaway without using a traditional pitch deck, instead relying on his personal charm and vision for the company's future.
Frequently Asked Questions
Can I buy a fractional share of Berkshire Hathaway?
Yes, you can buy a fractional share of Berkshire Hathaway, allowing you to invest a specific dollar amount rather than the full cost of a share. This means you can start investing with as little as $100, even if the full share costs more.
Sources
- https://www.reinsurancene.ws/berkshire-hathaway-exits-indias-paytm-with-164mn-sale/
- https://www.thehindubusinessline.com/money-and-banking/warren-buffets-berkshire-hathaway-exits-paytm-booking-loss/article67570735.ece
- https://www.businesstoday.in/markets/stocks/story/warren-buffetts-berkshire-hathaway-exits-paytm-books-loss-of-rs-830-cr-report-407057-2023-11-24
- https://www.nationalheraldindia.com/business/warren-buffetts-berkshire-hathaway-exits-paytm-with-rs-800-crore-haircut
- https://vip.graphics/paytm-pitch-deck/
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