India’s biggest asset management company Reliance Capital has sold the 1 per cent stake it held in mobile wallet and payments company Paytm to Chinese e-commerce behemoth Alibaba for Rs 275 crore, a PTi report citing sources said on Tuesday.
Interestingly, the company had acquired the stake in One97 Communications, the parent company of Paytm, for a paltry Rs 10 crore. The deal had also seen the Anil Ambani-controlled company get additional stake in Paytm Mall, the payment company’s e-commerce unit, at zero cost.
Reliance Capital will be retaining its stake in Paytm Mall which it got owing to its investment in Paytm when the payments company separated its digital commerce division into a fresh entity.
Earlier in December, One97 Communications’ founder and Paytm’s Chief Executive Officer Vijay Shekhar Sharma had sold 1 per cent from his stake in the parent company for about Rs 325 crore, valuing it at about Rs 32,500 crore.
The latest development comes close on the heels of Alibaba picking up a significant equity stake in Paytm Mall, valuing the newly-formed marketplace business at over $1 billion. The $200 million investment – with $23 million coming from SAIF partners – will see Alibaba formally enter the fastest growing e-commerce market in India and pit it against the likes of Amazon and Flipkart.
The move was significant as it came at a time when existing players have been faced with operational pressures, retrenchments and deep cut in valuations.