Reliance Sells Paytm Stake To Alibaba For Rs 275 Crore

China's online giant Alibaba-backed Paytm, the Indian payment and commerce company, today cited the outcry on social media as a reason for withdrawing 2 percent charge that it levied on money loaded in the wallet using credit cards.

New Delhi, March 07: Anil Ambani-led Reliance group firm Reliance Capital has sold its nearly 1 % stake in popular digital payments firm Paytm for Rs. 275 crore to China’s Alibaba Group.

The deal reaping huge gains for the Reliance Group.

Reliance Group’s financial arm had invested Rs. 10 crores for this stake in Paytm earlier.

The deal gives a valuation of over $4 billion to One97 Communications’ Paytm, which is already backed by Alibaba group as a strategic investor.

Sources said that Reliance Capital has to keep possession of a stake in Paytm e-Commerce, which it had got free of cost by virtue of the investment in the parent firm.

In the latest fund-raising round, the Delhi-based Paytm e-Commerce was valued at $1 billion.

Reliance Capital and Paytm spokespersons declined to comment on the deal.

Reliance Capital earlier said that it would crop its proprietary investment portfolio as part of its plans to monetise non-core assets.

In 2016 December, Vijay Shekhar Sharma, the founder and CEO of Paytm,  had sold 1 per cent of his stake in One97 Communications, the parent firm of Paytm, to raise about Rs. 325 crore. This money was to be pushed into One97 ‘s payments bank operations, which are expecting to commence soon.

In Paytm’s online marketplace unit, It is believed that Alibaba Singapore E-commerce and investment firm SAIF Partners, also invest $200 million.

The Chinese giant Alibaba’s $177 million investment in Paytm Mall, along with $23 million by the private investment firm SAIF Partners, is sure to pit it against online giants Amazon India, Flipkart, Snapdeal, Shopclues and others, making it one among the most prominent online business players in the fast growing Indian e-commerce industry.

Earlier last year, Paytm segregate its e-commerce business into a separate arm called Paytm Mall, with the speculations that it would lead to a prominent investor putting in funds into the new entity.