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Alibaba Group holding Ltd affiliate Ant financial services Group has decided to acquire 25% of One97 Communications; a leading online payment firm in India, in order to tap into smartphone and online industry of India.
An individual close to the matter called this investment a herald to One97 on the stock exchange, and stated that the company's stock is worth more than $500 million currently. However, the company did not disclose the value of the deal.
The deal with One97 was valued at more than $2 billion, and considered to be the most valuable deal in the country. The company runs an online system by the name of "Paytm", through which customers can do shopping or pay their electric bills. Ant ont he other hand runs Alipay, which is China's biggest online payment system. Alipay Wallet says it has almost 190 million users, whereas Paytm claims it has over 23 million users.
Founder of One97, Vijay Sharma and Alibaba spokesperson Teresa Li refused to reveal the value of the deal. The founder of the Indian company only attested that the company is seeking to buy shares in his company.
According to IDC, One97 has benefited from cheap handsets and excessive use of internet, making India the fastest growing smartphone market in Asia.
Jack Ma, co-founder Alibaba Groups claims that as Indian suppliers are the largest users of Alibaba websites after China, so he is paying more attention in order to increase investments in India.
In a joint conference the companies stated that the partnership between the them will encourage India's payment ecosystem to grow. Furthermore they added that a Chinese affiliate of Alibaba Holdings (NYSE:BABA) investing in an Indian company will provide its online payment platform system 'Paytm' technical as well as strategic support.
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According to Reuters, Ant financial would buy 30% to 40% stake at $550 million. On the other hand, One97 is looking forward to expand its mobile payment system business, and also to improve its services.
As reported by Gurtner, One97 says that it will use the Ant Financial investment for its user growth, e-commerce business and to expand its mobile payment system application. In return, Ant Financial will get stakes in Indian leading e-commerce industry, which will reach nearly $6 billion by the end of this year. Also, the company's total revenue has increased by 70% to $3.5 billion in 2014.
Vice President of Ant financials, Cyril Han said, "With more than one billion of population, Indian market has enormous potentials".
Citigroup Inc and Goldman Sachs Group Inc has also advised One97 Communications on this deal.
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