Alipay, the Chinese payments conglomerate under Ant Group, is gearing up to divest its 3.4 percent stake in the Indian food delivery behemoth Zomato, according to a Reuters news report. The anticipated stake sale is estimated to reach nearly $400 million through block deals on Indian stock exchanges.
Bank of America and Morgan Stanley are reported as advisers for the deal, which is expected to be executed later this week on Indian exchanges.
The block deals are set to transpire at 111.28 rupees per share, marking a slight 2.2 percent discount to Zomato’s closing price on Tuesday.
This divestment follows Japan’s SoftBank selling a 1.1 percent stake in Zomato earlier in October. The move aligns with the trajectory of the booming demand for online food ordering, propelling companies like Zomato to aggressively expand their market presence in India.
The exit of Alipay from Zomato mirrors a broader trend of Chinese investors scaling down their interests in Indian enterprises. In August, China’s Antfin divested a 10.3 percent stake in the Indian financial giant Paytm.
Despite a previous market downturn that saw tech stocks like Zomato facing substantial pressure due to concerns about high valuations, these companies have shown resilience. Recent times have witnessed a resurgence, with tech stocks rebounding following their earlier setbacks. This resurgence coincided with questions raised by investors regarding the towering valuations of some Indian startups that had made their stock market debut in recent years.
Alipay’s move to sell its stake in Zomato signifies a shift in investment strategies among Chinese stakeholders in the Indian market, underscoring evolving dynamics in the tech and investment landscape between the two countries.