After scrutinizing all viable pros and cons concerned with the deal, Reliance Capital has finally sold its 1% stake in Paytm to Chinese e-commerce marketplace Alibaba and its payment affiliate platform Ant Financial. The proceeding concluded at a purchase price of Rs 275 crores, which will be used to monetize non-core assets of Reliance Capital.
The company had been searching a potential buyer for several months and had approached multiple net worthy companies. Reliance Capital presently held 1% stake in Paytm at current date while the partial stake sale has resulted in over 25 times gains for the ADAG Group firm. The company a net worth of ₹15,390 crore (US$ 2.3 Billion) and total assets of ₹67,112 crore (US$ 10.2 Billion) as on 31st March 2016. It is looking to list its commercial and home finance business, slated to go public in April.
Paytm parent One97 Communications declined to comment on the recent transaction, standing at a valuation of $4.8 billion. Earlier, founder and CEO Vijay Shekhar Sharma had sold his 1 per cent holding in One97 Communications to raise about Rs 325 crore. The money was intended to be invested in the company’s payments bank service — Paytm Payments Bank Pvt. Ltd, expected to go live in a couple months.
One97 targets to onboard about 10 million merchants by December 2017 and will invest heavily in the development of the Payments Bank. The company is mulling to pool close to Rs 600 crore for backend improvisation concerning QR code-based payments feature for offline merchants. For its digital wallet app, the company crossed 200 million users in February, this year.
Alibaba along with its payment affiliate Alipay (its digital wallet service managed by Ant Financial) already holds a total of 40 percent stake in Paytm. The recent massive $177 million investment has led its combined shareholding to increase by around 22 percent, thus, making it own a majority 62 percent. This development also comes on the heels of the official launch of the digital payment major’s e-commerce marketplace called Paytm Mall.
Other influential investors have also been eyeing a secondary stake in One97 Communications, though the said discussions haven’t yet materialized into a successful transaction.
