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Reliance Capital turns Rs 10cr to Rs 275cr, sells its 1pc stake in Paytm to Alibaba

Binjal Shah
7th Mar 2017
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Sources have confirmed to PTI that Reliance Capital is selling its one percent stake in digital payments company Paytm for Rs 275 crore to China-based e-commerce major Alibaba group. The Anil Ambani-led company, which is one of India’s largest in asset management, had first bought this stake for Rs 10 crore – and had also received one percent equity in Paytm's e-commerce wing, Paytm Mall, free of cost, owing to its investment in the parent company.

Anil Ambani and Jack Ma | Images by Wikimedia Commons

Reliance Capital held their one percent equity stake in One97 Communications, which parents and owns Paytm. While they are selling off this one percent to Alibaba which already owns 40 percent at One97 as its largest shareholder, Reliance Capital has, in turn, decided to retain its one percent in Paytm Mall. The latter has now been made a separate entity from their wallet wing, as of last year.

This is part of Reliance Capital's agenda to monetise non-core assets, by liquidating its proprietary investment portfolio.

Earlier in December, One97 Communications’ founder and Paytm’s Chief Executive Officer Vijay Shekhar Sharma also sold the one percent he holds, at about Rs 325 crore, in order to raise capital to infuse into Paytm's payments bank. Its latest valuation, thus, is at about Rs 32,500 crore, which amounts to $4.8 billion.

Besides their 40 percent in the parent company, Alibaba Singapore e-commerce also recently pumped $177 million into Paytm Mall, valuing the newly formed marketplace business at over $1 billion, thus taking existing e-commerce unicorns Flipkart, Amazon, and Snapdeal head on. As of now, Paytm's founder Vijay Shekhar Sharma still owns about 21 percent in the company.

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