Friday, December 1

Berkshire Hathaway Eyeing to Acquire Stake in Paytm

Warren Buffett’s Berkshire Hathaway is looking to acquire a stake in Paytm’s parent company One97 Communications Ltd. The amount that the company is eyeing to invest is around Rs 2,000-2,500 crore.

This investment if implemented would be the first direct investment in India by the legendary billionaire investor.  It has been reported that the transaction could be completed in the coming weeks valuing Paytm at over $10 billion and giving it more lift.

“Berkshire is in talks to pick up a 3-4% stake in the company and it is being done through a primary subscription of shares,” said one of the people familiar with the matter.

Paytm had been in talks with Berkshire Hathaway since early February regarding this matter and the deal is just about t0 take place. The most important investors of the company already count Alibaba Group Holdings and Japan’s Softbank.

Along with this, this deal will also be Hathaway’s first investment in a privately-held technology company in the world. Previously, the company has majorly invested in public companies but now it seems to move towards the private sector.

According to a source, Todd Combs, one of Berkshire’s key fund managers, who is also seen as a potential chief investment officer at the firm, is leading the deal.

“Berkshire Hathaway is impressed by the scale that Paytm has been able to build in a short period of time. They realize that technology companies go through a cycle of losses before they start generating cash,” said the second source.

If the transaction goes through, it will give Paytm more firepower to strengthen its market leadership against other players such as Phonepe and Google’s Tez along with an anticipated competition from Facebook-owned WhatsApp and Reliance Jio.