According to media reports, China’s Alibaba Group sold a 3.1 per cent stake in digital payments firm Paytm in a block deal on Thursday for a total of $125 million. In afternoon trading, the company’s shares fell as much as 8.8 per cent to 528 rupees, and were down 5.8 per cent as of 3:00 p.m. Alibaba, which owned 6.26 per cent of Paytm at the end of September, sold the stake for 536.95 rupees per share.

Morgan Stanley provided advice to Alibaba on the transaction. Paytm’s stock has risen about 9 per cent this year as of the last close, following the release of strong preliminary third-quarter results. Despite the company announcing a share buyback in December, it ended 2022 with a 60 per cent loss.

Paytm, formerly known as One97 Communications, will go public in 2021 following a massive $2.5 billion initial public offering (IPO). Since then, the stock has fallen roughly 75 per cent from its IPO offer price as investors began to question the company’s monetisation plans amid concerns about tech companies’ sky-high valuations and fears of a global economic recession.

Softbank Group Corp sold a 4.5 per cent stake in the e-payments company for $200 million in November of last year. As of September 30, SoftBank owned 17.5 per cent of Paytm.

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