Chinese e-commerce giant Alibaba is in an advanced stage of discussion to pick up a substantial stake in Indian handset maker Micromax, a move that would help the former expand in one of the world’s fastest-growing markets.
The deal, if completed, could see Alibaba investing $1.2 billion (about Rs 7,673 crore) for a 20% stake in Micromax, valuing the company at up to $6 billion (about Rs 38,364 crore), Reuters reported.
Led by its dynamic founder Jack Ma, Alibaba began talks with Micromax after discussions with Japanese investor SoftBank failed last year. SoftBank Corp has been a shareholder in Alibaba since 2000. Alibaba Group did not respond to an email sent by HT till the time of going to press.
“Many investors have shown interest in picking up a stake in Micromax. There has been talks with Alibaba too, I cannot comment more than that,” a Micromax executive said.
The company said in a statement: “As a company policy, we do not comment on market speculations.”
During Jack Ma’s visit to India in March, the company had tweeted “Jack meets Prime Minister Narendra Modi to discuss how Alibaba can help empower small businesses in India.”
Micromax co-founder Rahul Sharma had told HT earlier: “We are always open to new ideas and opportunities to make Micromax a leader in electronics industry.”
The domestic handset maker is reportedly seeking funds from private investors, or even a possible stock market listing.
It has launched a new brand, YU, to attract the youth and the developer community, and plans to bring new innovative devices in online marketplaces.
“Mobile commerce is emerging big over e-commerce and an investment, by online commerce companies, especially with smartphones growing in India, is an expected trend,” said Shobit Khare, telecom analyst with Motilal Oswal Financial Services.
Alibaba would be able to roll out services such as Alipay, its online payment platform, on Micromax phones. Ant Financial Services Group, which owns Alipay, is China’s largest payment service provider.
Micromax started up in India in 2008, and currently counts Sequoia Capital and TA Associates among its investors.
(With Reuters inputs)