Business
Alibaba Exits Paytm, Offloads Shares Worth $166 Million
With Alibaba exiting Paytm, the markets will be closely tracking other Chinese groups and their investments in Indian companies.
In what many are terming as a significant change in Alibaba’s investment strategy in India, the Chinese conglomerate has exited Paytm, selling off its remaining stake.
Offloading 21.43 million shares in Paytm’s operator One97 Communications, the Chinese group conducted a transaction worth $166 million (Rs 13.7 billion). Each share was priced at Rs 642.74.
Since November 2021, Paytm share prices have been down almost 60 per cent. In January 2023, Alibaba offloaded 19.2 million shares.
In 2022, Alibaba exited Paytm’s online shopping app, Paytm Mall, as reported in Asia Nikkei. However, Alibaba’s fintech affiliate continues to hold a 25 per cent-odd share in Paytm, remaining a majority shareholder.
Chinese investments have been under the scanner since the Galwan clash and pandemic.
Along with banning several Chinese apps, the government had also regulated investment proposals from the Himalayan neighbour to ensure no strategic takeovers took place in critical sectors. Several Indian startups were also backed by Chinese groups in the past.
According to the data compiled by the American Enterprise Institute, Chinese firms have had significant stakes in Zomato, Swiggy, One97-the parent company of Paytm, BigBasket, Snapdeal, Paytm Mall and Ola.
China’s love for Indian startups can be gauged by the increased investments which rose from a mere $459 million in 2016 to around $3.9 billion in 2019.
However, things have changed post-Galwan. For the quarter ending in June of 2021, Indian startups raised more than $7 billion across 336 funding rounds.
However, the Chinese investors participated in only ten rounds, resulting in an investment of around $750 million, while US investors trusted Indian startups with more than $5.7 billion across more than 100 rounds.
In all four quarters of pandemic-cursed 2020, Chinese tech investments in India were less than the total investment in Q4 of 2019 alone.
In Q4 of 2020, Chinese investments hit an all-time low, registering the lowest numbers since Q4 of 2016. With Alibaba exiting Paytm, the markets will be closely tracking other Chinese groups and their investments in Indian companies.
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.
Latest
