Update: Berkshire Hathaway has picked up Rs 2,500 crore ($356 million) worth stake in One97 Communications-owned Paytm.
Warren Buffett’s assistant, Debbie Bosanek confirmed the deal via email. She also revealed that Buffett was not involved in the transaction, reports TOI.
Earlier version: In its first direct investment in India, Berkshire Hathaway led by billionaire Warren Buffet may pick up a significant stake of 3-4 per cent in payments major Paytm through a primary subscription of shares.
The American business magnate’s company has been in talks with Paytm to invest Rs 2,200- 2,500 crore at a valuation of about $10-12 billion.
The Alibaba-backed company was earlier valued a little over $10 billion during a secondary share sale by employees of the company.
Citing sources, an ET report reveals that 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 transaction.
The report further added that the transaction was discussed at the board meeting of Paytm held a few weeks ago. However, the size of the deal has not been finalised yet.
The development comes at a time when Paytm is entering into cloud business to support developers, startups, and enterprises. And it is also planning to launch its financial product platform Paytm Money soon.
With the backing from the renowned investor, Paytm will get more firepower to counter its rival in digital payments space such as Flipkart’s PhonePe, Google’s Tez and Facebook-owned WhatsApp.
Buffet who is known for his investments in major tech companies such as Apple and IBM has so far refrain himself from Indian internet companies, which are growing by leaps and bounds.
If the deal goes through, it will be interesting to see the synergy between the US and Chinese investors in the Vijay Shekhar Sharma-led company
Earlier, Berkshire Hathway entered the Indian market in 2011 with a partnership with Bajaj Allianz to sell insurance. The company exited two years later due to lack of profitability and compliances.
Several Berkshire portfolio companies have operations in India but it has not made any direct investments.