Paytm gives Reliance Capital a 2650% bonanza!

Anil Ambani-led group firm Reliance Capital has sold its about 1% in digital payments firm Paytm to China's Alibaba Group for Rs 275 crore.

The deal, which values Paytm at over USD 5 billion, has yielded huge gains for the financial services arm of the Reliance Group, according to sources.
Reliance Capital had invested Rs 10 crore for the stake in Paytm, they added.

The sources said Reliance Capital has retained a stake in Paytm e-Commerce (online marketplace unit), which it had got free of cost by virtue of the investment in the parent firm.

Alibaba Singapore e-commerce, along with investment firm SAIF Partners, is also slated to invest USD 200 million in Paytms online marketplace unit. The latest fund-raising round values Paytm e-Commerce at USD 1 billion.

A Reliance Capital spokesperson declined to comment on the deal, while Paytm spokesperson also did not comment. E-mails sent to Alibaba remained unanswered. One97 Communications has three units -- Paytm E-Commerce, Paytm Payments Bank (payments bank and mobile wallet service) and Paytm Mobile Solutions.

Earlier, Reliance Capital had said it would trim its proprietary investment portfolio as part of its plans to monetise non-core assets.

In December last year, Paytm founder and CEO Vijay Shekhar Sharma had sold 1 percent of his holding in One97 Communications, the parent firm of the digital payments firm, to raise about Rs 325 crore. This money was to be pumped into the groups payments bank operations, which are slated to start soon.

Alibaba, which has a stake in Indian e-commerce firm Snapdeal as well, has been expanding its shareholding in Paytm. This is expected to pave the way for its much-awaited entry into India that will see the Chinese e-commerce giant firm go head-to-head with Amazon India and Flipkart in the domestic market.