Mumbai Stock Exchange：Investment is not the Himalayas？The ＂stock god＂ Buffett India invested in eating, and lost 600 million in 5 years
Source of this article: Times Weekly Author: Ma Huan
"India earns money in Indian flowers, and wants to take it home." Unexpectedly, this drama actually fell on the head of the "stock god" Buffett.
According to Bloomberg, on November 25th, Beijing time, Berkshire Hathaway, who was in charge of Buffett, sold its "Alipay" Paytm company held by about 13.71 billion rupees (about RMB 1.2 billion).All of its shares and exited the company.
Data show that Bhkhill Hathaway’s BH International Holdings Company has sold more than 15.6 million shares of PayTM, with an average selling price of 877.29 rupees (about 75 yuan).
In September 2018, Berkshire Hathaway had spent 300 million US dollars (about RMB 2.1 billion) to acquire PayTM 2.6%of the shares. Based on the exchange rate at the time, the cost per share was about 1279.7 rupees, and the selling price wasIt is 877.29 rupees.Five years have passed. If this price is calculated, Buffett loses 31%per share and will lose about 6.2 billion rupees (about 600 million yuan) after clearance.
It seems that even the "stock god" is not so smooth in India.
India is one of the fastest -growing countries in the world, and Paytm is India’s largest mobile payment platform, known as "India Alipay".
In September 2018, it spent $ 300 million to acquire Paytm 2.6%of the shares. It is the first time Berkshire Hathaway has invested in Indian companies and the company’s first investment in private technology companies.Prior to this, Buffett generally only invested in listed technology companies, such as IBM and Apple.
It can be seen that it can break the convention for a Indian company.
According to the Financial Times, Buffett at that time was very optimistic about the rapid growth of the mobile payment market in India, and believed that there would be a huge development prospect for its investment.People familiar with the matter also revealed that if Paytm performs well in the future, Berkshire may also invest in.
Picture source: social media
Buffett said in an exclusive interview with the Indian financial media "Economic Times" at the time: "I think many changes in India are undergoing good changes and India’s potential is unparalleled. So if there are good projects or large projects to be sold, I must be right away.Set off."
In November 2021, Paytm was officially listed on the Mumbai Stock Exchange.During the first public offering (IPO), the issue price was 2,150 rupees per share, and the fundraising of 183 billion rupees (about 15.4 billion yuan) has created the largest IPO of the Indian capital market so far.
In addition to Buffett, Paytm has also attracted many big investment, such as SoftBank, Alibaba, the world’s largest asset management giant Belle, and Canada’s pension.
But everything just looks beautiful.
On the first day of listing, Paytm’s stock price fell below the issue price (about $ 29), and then fell all the way to the bottom of the $ 5.58 in 2022.
Even in 2023, Paytm’s stock price rebounded by more than 60%, but the current $ 10.73 stock price is still much lower than the price when the IPO.
For the reason, analysts believe that first of all, although India has a large population and huge market potential, it still cannot fully popularize mobile payment in the short term.Secondly, due to huge demand for operating funds, Paytm’s cash flow was negative in 2019, 2020 and 2021.Although the company has managed to reduce losses and strives to diversify the core business, so far, it still failed to make a profit.
Paytm has become one of the payment methods of Indian streets.(Source: Social Media)
The largest mobile payment company in India showed a loss last quarterly report. Investors hope that the company can turn losses into profits in 2024 after entering the credit business and expanding its main online payment.
With such a decline, the "stock god" had to cut meat.
Data show that after Buffett’s clearance, Paytm fell 5%in the Indian stock market, the largest single -day decline in the past month.
Sun Zhengyi also defeated repeatedly
The big brothers who eat in India not only Buffett, but also SoftBank’s Sun Zhengyi.
As early as 2014, Sun Zhengyi met with Indian Prime Minister Modi and said he was optimistic about the Indian e -commerce industry. SoftBank plans to invest 10 billion US dollars in India for several years.It was also this year that investors from all over the world were optimistic about India, which increased the inflow of foreign direct investment in this emerging country by 26%year -on -year.
In 2016, according to Reuters, Sun Zhengyi further stated that he would increase the amount of investing in India will eventually exceed $ 10 billion.
Sun Zhengyi first discovered the potential of the Indian e -commerce platform Snapdeal, becoming its biggest supporter, holding one -third of its shares.Sun Zhengyi hopes to make this platform into "Indian Alibaba" through investment.
Picture source: Sun Zhengyi himself social media
However, the entry of American e -commerce giants Amazon broke this dream and quickly squeezed Snapdeal’s access to third place in India.Not only that, many problems of Snapdeal’s own own also appear frequently.The company has experienced employee complaints, large -scale layoffs, and resignation of two executives, and encountered joint resistance from users in social media.
After Snapdeal, Sun Zhengyi aimed at Indian Software OLA. This application was often called "Indian Ti Didi".However, as of 2023, OLA’s valuation has been reduced by about 35%to $ 4.8 billion, and some businesses have been closed.Mumbai Stock Exchange
Sun Zhengyi’s greater investment failure comes from OYO of Indian unicorn.Established in 2013, OYO is an Indian economic chain hotel brand. Since its establishment, it has completed a total of nearly 20 rounds of financing, including many rounds of financing that Sun Zhengyi led his team to participate.
However, OYO has never found a sustainable profitable business model, the operation is in trouble, and the situation of major layoffs, executives, and weakness have appeared, becoming another mess of Sun Zhengyi.
Although the Indian Internet venture capital market has repeatedly suffered, Sun Zhengyi still did not give up. He was still confident in the Indian market for a long time. As he once said: "Indian market opportunities are unlimited, we hope to support some leading competitors in the market."
Unlike Sun Zhengyi’s optimism, his old acquaintance Buffett has temporarily left the scene.
For investors, India is always a market full of temptation and controversy.
According to the British "Economist" previously reported, from 2019 to 2020, Indian private investment accounted for only 22%of GDP, lower than 31%from 2010 to 2011.Investors privately acknowledged that they were worried that Modi’s use of the tax department was very and willful.
Which rich will be the next Indian story?
Kanpur Wealth Management
