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

1. At $5 billion, Pay tm 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

2. 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. Reliance Capital has still retained a stake in Paytm e-Commerce, which it had got free of cost by virtue of its investment in the parent firm, sources said. One97 Communication as well as its two subsidiaries — Paytm Payments Bank and Paytm Marketplace — had turned unicorn (valuation of $1 billion or more) recently. The group’s valuation last year was estimated at around $3 billion. Read more