Berkshire Hathaway plans Rs 2,500-cr stake buy in Paytm

Paytm’s Vijay Shekhar Sharma with Berkshire Hathaway’s investment manager Todd Combs

Paytm’s Vijay Shekhar Sharma with Berkshire Hathaway’s investment manager Todd Combs

One97 Communications, founded by billionaire Vijay Shekhar Sharma, runs the Paytm brand and is the leading player in India's booming digital payments market.

Todd Combs, investment manager, Berkshire Hathaway, said, "I have been impressed by Paytm and am excited about being a part of its growth story, as it looks to transform payments and financial services in India".

Using historical price data for Berkshire Hathaway class A shares from a retrospective analysis of Buffett's outsize returns and Yahoo Finance, we calculated how much $1,000 of Berkshire stock would be worth today if you had invested that money at the end of each year of Buffett's tenure. "It was good two years ago, it keeps getting better".

India's Economic Times had reported on Monday that Berkshire was in talks for a 3-4 per cent stake in a deal valuing Paytm at more than $10 billion, citing people familiar with the matter.

One97 Communications, the owner of Paytm, counts marquee global investors like Ant Financial and Alibaba as the other key shareholders.

The investment, which values the Alibaba and SoftBank-backed One97 Communications at over Dollars 10 billion, is likely to be announced in the next few weeks, according to two people familiar with the development.

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In May, Buffett said at Berkshire's annual shareholders meeting that the financial payments industry is a huge deal around the world and that many companies are working to reinvent the industry. A spokeswoman for Alibaba referred Reuters requests to Paytm.

This investment is expected to help Paytm strengthen its market leadership against Flipkart-owned PhonePe and Google's Tez besides potential competition from Facebook-owned WhatsApp and Reliance Jio.

Paytm, which has been aggressively diversifying its business into areas like investment management and e-commerce through various entities, had registered losses to the tune of Rs 899.6 crore in 2016-17.

Since then, Paytm's platform has seen manifold growth in transactions as well as expansion in number of users.

The company crossed an annual gross transaction run-rate of Dollars 29 billion in May this year. The company has created a host of payment solutions where consumers can transact via the Paytm digital wallet and Paytm Payments Bank.

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