Paytm Mall sees value drop to $13m from $3b as Alibaba, Ant exit

Update (May 18, 3:55 p.m. SGT): Adds response from Paytm.

Alibaba and Ant Financial have exited Paytm E-commerce, the parent firm of Indian online shopping app Paytm Mall, Entrackr reported, citing a notice sent by Paytm Mall to all shareholders.

According to the note, Ant and Alibaba “expressed their desire to exit their investments in the company” as Paytm Mall deals with declining market economics and “demanding circumstances” that are dragging the company’s financial metrics lower.

Paytm Mall will reportedly slash its share capital from 2.12 million to 1.2 million shares by canceling the shares held by Alibaba and Ant Financial. Currently, Ant holds a 14.98% stake in Paytm Mall, while Alibaba holds a 28.43% stake.

However, a Paytm spokesperson said that the exit price of investors in the company via the capital reduction process is not reflective of the valuation of the company.

While Paytm Mall will pay the two firms 459 rupees (US$5.9) per share, the Indian company is taking a 99% plunge in its market value to US$13 million. The firm was valued at US$3 billion after eBay led Paytm Mall’s US$160 million round in July 2019.

Currency converted from Indian rupees to US dollar: US$1 = 77.64 rupees.

See also: Why was Paytm’s market debut a flop?