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

Hong Kong
CNN
 — 

Chinese e-commerce big Alibaba has bought its remaining stake in Paytm, India’s prime digital payment application, as it step by step divests from its Indian investments amid friction amongst Beijing and New Delhi.

Alibaba.com Singapore E-commerce Personal Ltd marketed 21.43 million shares of 1 97 Communications, the dad or mum company of Paytm, at 642.74 rupees apiece, in accordance to Friday data from India’s National Inventory Trade (NSE). The deal is worth about 13.77 billion rupees ($167 million), in accordance to CNN calculations.

In January, Alibaba marketed about 3{3df20c542cc6b6b63f1c547f8fb389a9f235bb0504150b9df2ff264aa9a6c16c} of Paytm for $125 million, chopping its holdings from 6.26{3df20c542cc6b6b63f1c547f8fb389a9f235bb0504150b9df2ff264aa9a6c16c}, based mostly on NSE information.

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

Shares in One particular 97 Communications plunged just about 8{3df20c542cc6b6b63f1c547f8fb389a9f235bb0504150b9df2ff264aa9a6c16c} on Friday. It bounced back again marginally on Monday early morning. Alibaba and Paytm did not right away answer to CNN’s ask for for comment.

Founded in 2010, Paytm is India’s premier payment system, with far more than 300 million registered buyers and in excess of 20 million merchants. It’s backed by big title investors this kind of as Ant Group, an affiliate of Alibaba, Softbank

(SFTBF) and Warrent Buffet’s Berkshire Hathaway

(BRKA).

Alibaba and Ant Group collectively made a “strategic” expenditure in Paytm in September 2015, in an extension of the initial expenditure built by Ant in February of that calendar year.

At that stage, Alibaba explained the expense would improve its means to faucet prospects in India’s quick-developing mobile commerce marketplace and electronic finance market. Paytm and Ant Group experienced been operating on “synergies” due to the fact Ant produced the initial investment decision, the company claimed.

Ant Group, which operates China’s foremost digital payment application Alipay, stays Paytm’s premier shareholder with a 25{3df20c542cc6b6b63f1c547f8fb389a9f235bb0504150b9df2ff264aa9a6c16c} stake, according to the most current facts from Refinitiv Eikon.

Alibaba has slowly exited its investments in India, immediately after New Delhi imposed restrictions in 2020 that manufactured it tricky for Chinese buyers to devote in Indian firms.

China and India share a disputed border that has extended been the resource of friction concerning New Delhi and Beijing, with tensions escalating sharply in June 2020, when hand-to-hand fighting between the two sides in the Himalayas resulted in the fatalities of at minimum 20 Indian and four Chinese troopers.

Past December, Indian and Chinese troops clashed yet again along the border, which at the time was the to start with identified incident concerning the two nuclear-armed Asian powers in just about two a long time — while online video afterwards emerged suggesting a previously unreported clash happened in 2021.

In early 2021, Alibaba bought a key stake in BigBasket, an on the internet grocery retailer, to Indian conglomerate Tata Group. In Might 2022, Alibaba and Ant Group offloaded their whole stake in Paytm Mall, the e-commerce system of Paytm. In November 2022, Ant Team reportedly bought a stake of about 3{3df20c542cc6b6b63f1c547f8fb389a9f235bb0504150b9df2ff264aa9a6c16c} in Zomato for $200 million, in accordance to Reuters.

Alibaba alone has also been under force from domestic regulatory crackdowns and economic headwinds. A government marketing campaign aimed at reining in the country’s technological know-how giants, coupled with a weak overall economy, has sharply slowed income advancement at the corporation, battered its share price tag and made small business expansion much more tough.

Last 12 months, Alibaba posted flat earnings growth for the initial time because likely community in 2014.