Alipay, the Chinese payment giant owned by Ant Group, is gearing up to sell its 3.4% stake in Indian food delivery behemoth Zomato for nearly $400 million, according to Reuters. The transaction, executed through block deals on Indian stock exchanges, marks a significant divestiture in one of India's largest tech startups. Bank of America and Morgan Stanley, the advisors for the deal, are orchestrating the sale, expected to take place later this week.
This divestment strategy emerges in a climate where Zomato's shares have seen a remarkable surge, climbing over 90% this year after a slump in 2022, mirroring the broader struggles of tech stocks globally. "The timing is good," one source commented, alluding to Zomato's recent bullish performance. The shares are set to be offloaded at 111.28 rupees each, representing a modest 2.2% discount to Zomato's closing price on Tuesday.
Alipay's stake sell-off in Zomato reflects a broader trend among Chinese investors who have been reducing their holdings in Indian companies. This movement was exemplified in August when Antfin sold a 10.3% stake in another Indian tech giant, Paytm. The decision to exit Zomato, India's leading food delivery service, comes at a time when online ordering demand has skyrocketed, propelling aggressive expansion by companies like Zomato.
The proposed block deal involves the sale of 29.6 crore shares by Alipay, at the quoted price of Rs 111.28 per share, according to CNBC TV-18. This sale is poised to yield about Rs 940 crore, marking a substantial exit for Alipay from the Indian market.
Alipay's withdrawal coincides with a significant recovery in tech stocks, including Zomato, which had faced intense scrutiny over their valuations amid a broader market meltdown last year. As investors reevaluate the potential of Indian startups, many of which debuted in the stock market recently, this move by Alipay signifies a strategic shift in its investment portfolio.
As Zomato continues to dominate the Indian food delivery market, the sale of Alipay's stake is being closely watched by market analysts and investors. It highlights the dynamic nature of global tech investments and the shifting landscapes of strategic stakes held by major international players in burgeoning markets like India.
Representatives from Zomato, Bank of America, Morgan Stanley, and Alipay have not immediately responded to requests for comments on this development. This unfolding scenario presents a fascinating case study of the interplay between global investment strategies and the evolving tech landscape in one of the world's largest and most rapidly growing markets.