Buffett is reportedly looking to make his first direct investment in India in Paytm.
Reports have surfaced that Buffett, through his US-based holding company Berkshire Hathaway, is in talks to invest about $286.81 Mn-$358.37 Mn (INR 2,000-2,500Cr) in Paytm’s parent company One97 Communications.
It is being speculated that the deal could be clinched in the coming weeks, valuing Indian digital payments giant Paytm at about $12 Bn.
With existing investors like China’s Alibaba Group Holdings and Japan’s SoftBank, Paytm is one of the most valued companies in India and achieved $10 Bn valuation earlier this year after a secondary share sale by employees.
It is being speculated that Berkshire Hathaway is in talks to pick up a 3-4% stake in the company through a primary subscription of shares.
The transaction was discussed at a board meeting of Paytm held a few weeks ago. However, the deal size, as well as other details, have not been finalised yet.
“Berkshire Hathaway is impressed by the scale that Paytm has been able to build in a short period of time. They realise that technology companies go through a cycle of losses before they start generating cash,” the report added.
Further, it is being speculated 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.