Chinese fintech big Ant Group is contemplating promoting its 30 per cent stake in Indian digital cost processor Paytm amid tensions between the 2 Asian neighbours and a toughening aggressive panorama, individuals with direct information of the matter mentioned.
Financial particulars of the doable transaction haven’t been firmed up and Ant, the Alibaba-backed payments-to-consumer credit score behemoth, has not launched a proper sale course of but, 4 individuals informed Reuters.
Paytm, which can be backed by SoftBank Group Corp amongst others, was valued at about $16 billion throughout its newest non-public fundraising spherical a yr in the past. At that valuation, Ant’s stake within the Indian agency is value about $4.8 billion.
The fundamental set off for Ant to contemplate the divestment of its stake in Paytm is the worsening diplomatic relations between India and China previously few months, mentioned the individuals, who declined to be named because the deliberations are confidential.
Relations between the international locations are at a nadir, with troops locked in a border face-off within the western Himalayas for months after a conflict in June wherein 20 Indian troopers had been killed.
Since the conflict India has tightened guidelines for investments from China and banned dozens of Chinese cell apps, together with from tech giants Tencent, Alibaba and ByteDance. It banned 43 extra apps late final month.
“There is a growing realisation within Ant management that it would not be able to raise its stake in the company,” one of many individuals with direct information mentioned, including senior managers at Ant have mentioned the concept not too long ago.
Indian start-ups are closely funded by Chinese traders equivalent to Alibaba and Tencent. Bankers have beforehand mentioned they had been seeking to bolster their presence within the nation with an purpose to develop their income exterior China.
Online transactions, lending and e-wallet companies have been rising quickly in India, led by a authorities push to make the nation’s cash-loving retailers and shoppers undertake digital funds.
That has led to the entry and growth of Facebook-owned WhatsApp, Alphabet Inc’s Google Pay, and Walmart’s PhonePe. Some home gamers are additionally increasing operations.
Alibaba didn’t reply to a request for remark.