Reliance Capital, that until recently owned a 1% equity stake in One97 Communications, the parent company of Paytm, has sold its stake to China-based company, Alibaba, in a deal close to Rs.275 crore. This deal has brought a 27-fold return on investment for Reliance Capital led by Anil Ambani, as reported by a source familiar with the details of the deal.
Reliance Group made an investment of Rs.10 crore in Paytm. According to the source in communication with Economic Times, Paytm shares have been sold at more than Rs.7,000 per unit to Alibaba. After this deal Paytm has a valuation of more than $4 billion.
Reliance Capital had earlier mentioned that the company is looking to monetize its non-core assets and will trim its investment portfolio accordingly.
Sources have confirmed that Reliance Capital has retained its stake in Paytm e-commerce called “Paytm Mall”, one that the company received for free for the investment made in One97 Communications. Paytm Mall was established last year and handles the e-commerce business for the company.
Alibaba has also picked up an equity stake worth $177 million in Paytm Mall, valuing it at more than $1 billion. Alibaba is said to have approximately 41% equity stake in the parent company, One97 Communications. SAIF Partners, a private equity investment firm has also made a $23 million investment in Paytm Mall.
In December 2016, CEO of Paytm, Vijay Shekhar Sharma sold 1% stake from his holding in One97 Communications and raised Rs.325 crore.