Elevation Capital’s massive gamble on Paytm backfires

economictimes.indiatimes.com:

Elevation Capital, the largest institutional shareholder in One 97 Communications-- owner of digital payments brand Paytm-- is staring at a massive erosion in the worth of its holding, amid a free-fall in the shares of the beleaguered company following the regulatory ban on its payment bank operations that comes into effect on March 15.

The Ravi Adusumalli-led fund’s 15% stake in One 97, which was valued at about Rs 6,100 crore when the post-IPO lock-in expired in November 2022, had shrunk by nearly 40% to Rs 3,800 crore at the end of trading on Thursday.

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Following the Reserve Bank of India’s directive on Paytm Payments Bank, which was announced on January 31, the stock price of One 97 Communications has declined by nearly 50% triggering a sharp decline in investor wealth.

Elevation, which is also an early investor in unicorn startups such as Swiggy, Urban Company, Unacademy and Meesho, has not sold any Paytm stock after completion of the mandatory lock-in period following a public listing.

Also read | Paytm Payments Bank customers can use basic services till March 15


“Elevation’s notional gains would be shaved off dramatically after the RBI ruling, but they entered the company so early that they will still be in the positive. However, it won't be