Dikshit, who was fined $300 million after pleading guilty last December to an online betting charge in the United States, said in a statement on Tuesday he sold 75 million shares or about 18 percent of the company, at a price of 250 pence per share.
That was a 12 percent discount to Monday's closing price and was at the lower end of the 250-260 pence price range analysts had expected.
Shares in the company, which have more than doubled in value over the last twelve months, were down 12.6 percent to 248.8 pence at 1220 GMT (1:20 p.m. British time).
Analysts said the sale should be positive for PartyGaming in the long-term as it increases the level of institutional investment in the stock and makes a re-entry into the U.S. more feasible.
"He (Dikshit) has clearly decided to use the strong recent run to partially cash in and we would advise buying on today's drop, with the shares benefitting from an increased free float," said Daniel Stewart analyst James Hollins.
Prior to the sale, PartyGaming had a free float of less than 45 percent as co-founders Russell and Ruth DeLeon have also retained a 28 percent stake.
Davy Stockbrokers analyst David Jennings said Dikshit could now look to sell off the remainder of the stake or put it in a trust for his charitable foundation, improving the company's chances of returning to the U.S. should the current laws change.
"Under current U.S. law operators are unlikely to get licenses if any of their beneficial owners have criminal records. If they're going to win a licence he is going to have to sell down his stake," he said, Jennings said.
PartyGaming itself reached an agreement in April with U.S. authorities which will protect it from prosecution. The disputes arose after the industry was outlawed by legislation introduced in the U.S. in 2006.
Dikshit, co-founded PartyGaming in 1997 and was the driving force behind its user-friendly technology, which helped the company take a place in the FTSE 100 following a flotation on the London Stock Exchange in 2005.
($1=.6088 Pound)
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