By Newley Purnell 

NEW DELHI -- Warren Buffett's Berkshire Hathaway Inc. is in talks to invest in India's largest mobile-payments firm, according to a person familiar with the matter.

Mr. Buffett's conglomerate is set to pour 20 billion to 25 billion rupees ($285 million to $357 million) into One97 Communications Ltd., the parent company of Paytm. The Noida, India-based firm makes a popular smartphone app that can be used to pay for everything from movie tickets to auto-rickshaw rides.

Paytm, which says it has more than 300 million users, saw its usage skyrocket in 2016 when India's government nullified its largest-denomination notes, a bid to root out tax evasion and corruption that triggered a cash shortage.

India now has 390 million internet users, more than the U.S. and second only to China, according to a report last month from consultancy Bain & Co. Global tech titans are rushing to tap into the South Asian nation's internet economy, which is growing quickly as smartphone and mobile data prices fall and hundreds of millions of people get online for the first time.

Berkshire didn't immediately respond to a request for comment early Monday morning.

Paytm last year raised $1.4 billion from Japan's SoftBank Group Corp. Earlier investors include Chinese tech giant Alibaba Group Holding Ltd. and its financial-services affiliate, Ant Financial Services Group.

A SoftBank spokeswoman in India declined to comment

A spokesman for Ant Financial said the company doesn't comment on "market rumors."

The investment would give Berkshire a 3% to 4% stake in Paytm's parent, the person said. That would give Paytm, which isn't profitable, a valuation of more than $10 billion, up from more than $7 billion when it raised funds from SoftBank last year. A deal could be announced in the coming weeks, the person said. The talks were earlier reported by India's Economic Times newspaper.

Berkshire portfolio manager Todd Combs is handling the deal, according to the person. He is one of four executives, including India-born Ajit Jain, who the 87-year-old Mr. Buffett has said handle many day-to-day responsibilities in running the firm.

Omaha, Neb.-based Berkshire Hathaway, which runs a large insurance operation and has businesses ranging from retail to railroads, has been searching for profitable ways to spend its more than $100 billion in cash. Among its biggest stockholdings is Apple Inc. As of June 30, Berkshire was Apple's second-largest shareholder after Vanguard Group, holding 4.96% of the tech giant's stock.

Mr. Buffett earlier this year offered to invest $3 billion in Uber Technologies Inc., but the two sides couldn't agree on the terms, according to a person familiar with the matter.

Berkshire made its maiden India venture in 2011, launching an online insurance distributor that sells Bajaj Allianz General's products.

"If you'll tell me a wonderful company in India that might be available for sale, I'll be there tomorrow," Mr. Buffett said last year in an interview with an Indian television news outlet. "I think the potential for India is incredible," he said. "It's a lot of people, a lot of buying power."

Still, asked about his insurance partnership he said, "Sometimes there have been restrictive laws in terms of the percentage we could own, and that's a disadvantage. We would like to own 100% of any business we run."

Paytm "has the capability of becoming a Tencent, and they have time on their hands," said Satish Meena, an analyst at Forrester Research, referring to Chinese internet behemoth Tencent Holdings Ltd.

Mr. Meena said Patym could benefit from not just Berkshire's cash, but from their vast expertise, as the Indian firm is eager to move beyond mobile payments and offer services such as insurance.

--Liza Lin and Nicole Friedman contributed to this article.

Write to Newley Purnell at newley.purnell @wsj.com

 

(END) Dow Jones Newswires

August 27, 2018 08:33 ET (12:33 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
Berkshire Hathaway (NYSE:BRK.A)
Historical Stock Chart
From Aug 2024 to Sep 2024 Click Here for more Berkshire Hathaway Charts.
Berkshire Hathaway (NYSE:BRK.A)
Historical Stock Chart
From Sep 2023 to Sep 2024 Click Here for more Berkshire Hathaway Charts.