February 27, 2024

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Alibaba sells remaining stake at India’s Paytm as it continues to exit industry

Alibaba.com Singapore E-commerce Non-public Ltd marketed 21.43 million shares of 1 97 Communications, the mother or father firm of Paytm, at 642.74 rupees apiece, in accordance to Friday details from India’s National Stock Trade (NSE). The offer is well worth about 13.77 billion rupees ($167 million), according to CNN calculations.

In January, Alibaba bought about 3% of Paytm for $125 million, reducing its holdings from 6.26%, based mostly on NSE knowledge.

With Friday’s deal, it has sold its overall direct stake in Paytm.

Shares in A person 97 Communications plunged virtually 8% on Friday. It bounced again a little bit on Monday morning. Alibaba and Paytm didn’t right away answer to CNN’s request for comment.

‘India’s Alipay’

Launched in 2010, Paytm is India’s most significant payment system, with more than 300 million registered consumers and around 20 million merchants. It’s backed by huge title investors this kind of as Ant Team, an affiliate of Alibaba, Softbank (SFTBF) and Warrent Buffet’s Berkshire Hathaway (BRKA).

Alibaba and Ant Team together built a “strategic” financial commitment in Paytm in September 2015, in an extension of the preliminary financial investment made by Ant in February of that yr.

At that issue, Alibaba mentioned the expense would improve its capacity to tap chances in India’s rapid-escalating mobile commerce current market and digital finance sector. Paytm and Ant Team experienced been operating on “synergies” considering that Ant designed the first financial commitment, the firm mentioned.

Ant Team, which operates China’s main electronic payment app Alipay, stays Paytm’s largest shareholder with a 25% stake, according to the most latest knowledge from Refinitiv Eikon.

India's IPO boom has rapidly turned to bust
Alibaba has progressively exited its investments in India, immediately after New Delhi imposed limits in 2020 that designed it difficult for Chinese investors to spend in Indian companies.
China and India share a disputed border that has extensive been the supply of friction amongst New Delhi and Beijing, with tensions escalating sharply in June 2020, when hand-to-hand fighting concerning the two sides in the Himalayas resulted in the fatalities of at the very least 20 Indian and four Chinese soldiers.
Very last December, Indian and Chinese troops clashed once again together the border, which at the time was the first recognized incident involving the two nuclear-armed Asian powers in just about two a long time — even though video later on emerged suggesting a formerly unreported clash happened in 2021.
In early 2021, Alibaba bought a important stake in BigBasket, an on the net grocery retailer, to Indian conglomerate Tata Group. In May well 2022, Alibaba and Ant Team offloaded their full stake in Paytm Shopping mall, the e-commerce platform of Paytm. In November 2022, Ant Group reportedly offered a stake of about 3% in Zomato for $200 million, in accordance to Reuters.
Alibaba by itself has also been below force from domestic regulatory crackdowns and financial headwinds. A govt marketing campaign aimed at reining in the country’s engineering giants, coupled with a weak economic system, has sharply slowed product sales advancement at the organization, battered its share cost and manufactured organization growth more difficult.

Final year, Alibaba posted flat revenue development for the to start with time because going public in 2014.

CNN’s Simone McCarthy contributed to this report.