China’s Alibaba eyes bigger Paytm stake

02-Jul-2015 # Wider Regions Source: India Inc

One of the world’s largest e-commerce giants, China-headquartered Alibaba Group, is eyeing a larger stake in Indian online payment platform Paytm.

According to reports, Alibaba is in advanced negotiations to invest over $600 million to pick up a 20 per cent additional stake having already bought into Paytm through one of its affiliates.

Ant Financial had picked up a 25 per cent stake in the Indian firm’s owner One97 Communications back in February.

Alibaba has so far declined to comment on the development but a spokesperson for Paytm said the group regularly engaged with investors on “various funding opportunities”.

The move indicates Alibaba’s interest in hiking its presence in India’s rapidly growing online market.

The fresh investment, which is over and above an outstanding tranche of the previous transaction under which the Alibaba Group was to have pumped in another $375 million, will see Paytm being valued at $3.7 billion on a post money basis.

This would mark a 270 per cent increase on the $1-billion valuation in the previous funding round. Alibaba Group Holdings could pick up a 20 per cent stake in the company under the latest transaction while its affiliate Ant Financial will see its existing 25 per cent stake in the company reduce to 20 per cent.

Valuations in India’s e-commerce sector have been on a high led by Flipkart which raised money last year at a valuation of $1 billion and is now in the market to raise fresh funds at a target value of $16 billion.

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