Reliance Capital exits Paytm stake to Alibaba for $41m

The exit comprises Reliance’s entire 1% holding in Paytm parent One97 Communications, which the firm bought in 2010 for INR100 million according to the Press Trust of India, which cited sources close to the deal. Reliance will retain about a 1% stake in Paytm E-Commerce, which the GP received free of charge when the division was created last year to operate Paytm’s online marketplace.

Alibaba’s purchase follows its investment of $200 million in Paytm E-Commerce alongside SAIF Partners earlier this month in a deal said to value the division at $1 billion. The earlier purchase raised Alibaba's stake in Paytm E-Commerce to 36.3%. Alibaba already holds a 20% stake in One97 which it purchased in 2015, along with a further 20% bought by its online finance affiliate Ant Financial Services Group the same year.

One97 was founded in 2000 to provide value-added services to Indian mobile operators, and introduced subscription-based content as the business expanded. Paytm was launched in 2009 as a mobile recharge and utility bill payments platform. Later the company added the online marketplace which is now branded as Paytm Mall and recently launched a separate app and website.

Paytm Mall faces an uphill battle to build its presence in India’s e-commerce market, which is already the scene of fierce competition between homegrown rivals Flipkart and Snapdeal and global giant Amazon. Alibaba is also a backer of Snapdeal, having led a $500 million investment in the company in 2015 along with SoftBank Group and Foxconn Technology Group.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Technology
• Consumer
• Financials
• Trade sale
• India
• Reliance Capital
• Alibaba Group
• TMT