Paytm Plans to Sell Stake to Warren Buffet’s Berkshire Hathaway

Paytm plans to raise about Rs 2,200- 2,500 crore ($300-350 million) at an estimated valuation of $10-12 billion.

One97 Communications Ltd, the parent company of Paytm, is reportedly in final talks to sell a stake to Warren Buffett’s Berkshire Hathaway Inc. If the deal comes through it will be Warren Buffett’s, the billionaire investor, first investment in an Indian company.  Paytm plans to raise about Rs 2,200- 2,500 crore ($300-350 million) at an estimated valuation of $10-12 billion.

Warren Buffet, 87, has been a world-famous investor and is the chairman and chief executive officer of Berkshire Hathaway. He is the third wealthiest person in the world with a net worth of $84 billion (Rs 5.88 lakh crore) as of June 3, 2018.

Berkshire Hathaway started the business in 1839 as a textile company. Today it owns diverse businesses from property and casualty insurance, reinsurance, finance, manufacturing, to retailing.

Paytm could be his first investment in a technology company in the world. His company, Berkshire Hathaway is known for making investments in big companies such as International Business Machines (IBM) Corp. and Apple.

This is not the first time that Berkshire Hathaway, is is planning investment in India. Earlier in 2011, it set up Berkshire India, a subsidiary of Berkshire.

Hathaway, to sell insurance products of Bajaj Allianz through its distribution portal berkshireinsurance.com. Berkshire India acted as a corporate agent of Bajaj Allianz General Insurance.

Warren Buffett is famous for his charitable activities. He has given away about 290 million Berkshire Hathaway Class B shares to charities. He has also donated to Gates’s foundation.

Paytm, the mobile payments company, plans to sell mutual fund from its platform live within the next two weeks. Considering, nearly half of Paytm wallet’s transactions are from tier 2 and tier 3 cities, it is expected that it will increase the penetration of mutual funds to the remotest part of the country. It is to be seen whether Berkshire Hathway will use Paytm platform to sell insurance, for which the country is famous for.