At $5 billion, Paytm is close to Flipkart in value

Alibaba buys back less than 1% stake held by Reliance Cap in the e-commerce company for $41 million

China’s top e-commerce player and lead investor in Paytm, Alibaba, has bought a marginal stake held by Reliance Capital for $41 million. While the deal has meant a 27-fold return for the Anil Ambani-led firm, it has lifted the valuation of One97 Communications, the parent company of Paytm, to an estimated $5 billion at a time when the e-commerce universe is facing severe markdowns.    

Reliance Capital had acquired less than one per cent stake in One97 Communications for $1.51 million in 2009.  

With this, the Paytm group has risen to the second position in the e-commerce valuation pecking order, if only companies with Indian founders are counted. Flipkart, whose valuation had risen to more than $15 billion a year ago, has gone through several markdowns. The latest markdown by Morgan Stanley pegged Flipkart’s valuation at $5.39 billion. Another prominent online player — Snapdeal — was till a year ago valued at around $6.5 billion, but the company is learnt to be in talks to raise capital at a valuation lower than $4 billion. 

Both Paytm and Reliance Capital did not divulge any details of the deal. But sources said everything was finalised late Monday evening. Read more