Alibaba sells assets and leaves the Indian market
2023.02.13 02:51
Alibaba sells assets and leaves the Indian market
By Tiffany Smith
Budrigannews.com – In the midst of conflict between Beijing and New Delhi, Chinese e-commerce giant Alibaba has sold its remaining stake in Paytm, India’s most popular digital payment app.
According to data from India’s National Stock Exchange (NSE) on Friday, Alibaba.com Singapore E-commerce Private Ltd sold 21.43 million shares of One 97 Communications, Paytm’s parent company, for 642.74 rupees each. CNN estimates that the deal is worth about 167 million dollars, or 13.77 billion rupees.
According to NSE data, Alibaba sold approximately 3% of Paytm for $125 million in January, reducing its holdings from 6.26 percent.
It has sold its entire direct stake in Paytm as a result of the deal on Friday.
On Friday, One 97 Communications’ shares fell nearly 8%. Monday morning, it slightly rebounded.
With over 20 million merchants and more than 300 million registered customers, Paytm is India’s largest payment platform, having been established in 2010. It is supported by well-known investors like Softbank, Ant Group, an affiliate of Alibaba, and Alibaba. Ant Group and Alibaba made a “strategic” investment in Paytm in September 2015, which was an extension of Ant’s initial investment in February of that year.
At that point, Alibaba stated that the investment would improve its capacity to capitalize on opportunities in the digital finance sector and India’s rapidly expanding mobile commerce market. According to the company, Paytm and Ant Group had been working on “synergies” ever since Ant made the initial investment.
According to the most recent data from Refinitiv Eikon, Ant Group, which owns 25% of Paytm and runs China’s most popular digital payment app Alipay, is Paytm’s largest shareholder.
After New Delhi imposed restrictions in 2020 that made it difficult for Chinese investors to invest in Indian businesses, Alibaba has gradually exited its investments there.
In June 2020, hand-to-hand fighting between the two sides in the Himalayas resulted in the deaths of at least 20 Indian and four Chinese soldiers. China and India share a disputed border that has long been the source of friction between New Delhi and Beijing.
In December of last year, Indian and Chinese troops clashed once more along the border. At the time, it was the first known incident in nearly two years between the two nuclear-armed Asian powers. However, video later emerged suggesting a clash in 2021 that had not been reported before.
Alibaba gave Indian conglomerate Tata Group a significant stake in online grocery retailer BigBasket at the beginning of 2021. Alibaba and Ant Group sold their entire stake in Paytm’s e-commerce platform, Paytm Mall, in May 2022. Ant Group reportedly paid $200 million for a 3 percent stake in Zomato in November 2022.
Domestic regulatory crackdowns and economic headwinds have also put pressure on Alibaba. The company’s sales growth has been significantly slowed, its share price has been battered, and business expansion has been made more difficult as a result of a government campaign to rein in the country’s technology giants and a weak economy.
For the first time since going public in 2014, Alibaba’s revenue growth was flat last year.
