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Reliance Capital Scores 2650% ROI From 1% Stake In Paytm

Alibaba entities pick up the stake, a move that will likely increase non-Indian presence in Indian ecommerce.

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Photo Credit : VCCircle,

After Reliance Capital sold its share of 0.83 percent (if we round it out that’s 1 percent) in the parent company of Paytm, One97 Communications it has scored a very happy exit of 2650 percent.

The asset management company led by Anil Ambani purchased the minor stake in 2010 for 10 crores. Now in, 2017 the stake fetched a hefty sum of 275 crores.

Reliance Capital’s share was absorbed by Alibaba and Alipay according to sources.

The Indian financial services company is exiting Paytm at a time interest from the Far East companies is increasing. Chinese ecommerce company Alibaba was reported to have shelled 177 million dollars to invest in Paytm Mall, Paytm’s highly anticipated ecommerce platform. The investment which was made through Alibaba Singapore E-Commerce Private Limited is part of a 200 million dollar investment round which includes SAIF Partners, the VC firm originating in Hong Kong.

From their founder’s daredevil office party speech to appearances at the World Economic Forum, Paytm has been working round the clock to create a cashless economy. The company has set up Paytm Lab which hires Canadian data scientists to innovate cashless mobile payments, and even run marketing campaigns to encourage a cashless travel economy with promotions like zero cancellation fee on bus ticketing. Don’t forget Paytm Bank is also slated to launch this year.

While the ecommerce unit has been spun off as a separate entity from One97 which still houses the cashless payments division, all this ties in well with the strategy to introduce Paytm Mall to an Indian market that is primed, ready and reliant on Paytm to do business.

This also means that the ecommerce war is going to get heavier, and more multinational.

While the Big 3 in Indian ecommerce has so far been Flipkart, Amazon and Snapdeal, it looks like there’s going to be a formidable fourth player entering the ring in Paytm Mall. If we may make one more observation it is also worthy to note that with Snapdeal’s flame burning lower and lower, Indian ecommerce won’t even be dominated by Indian companies any more. We will have Amazon which is American, Flipkart which is Indian (but has so many influential investors who aren’t Indian), and the Paytm ecommerce entity of which Alibaba now supposedly owns 62 percent.

No wonder Reliance Capital was reported to have been looking to sell their minor stake and get out of the way.


Tags assigned to this article:
one97 paytm Paytm Mall SAIF alibaba reliance capital 1%

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