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Chinese payments group Alipay is selling its stake in food delivery aggregator Zomato through block deals on Indian stock exchanges, a report said. The company has launched a $400 million accelerated bookbuild to sell its stake, according to the deal’s term sheet.
The development comes a few hours after news agency Reuters reported that the Alibaba Group-owned payments company will offload its entire 3.44% stake in the deal.Bank of America and Morgan Stanley are advisers on the deal and it is likely to be executed later this week on Indian exchanges.
Why Alipay is selling its stake
Zomato shares have surged more than 90% this year and Alipay “wants to cash out … the (market) timing is good,” the publication quoted one of the three sources it talked to earlier. The block deals are set to be executed at Rs 111.28 per share, which is a 2.2% discount to Zomato’s close on Tuesday.
Alipay invested $360 million in Zomato in 2018 for a total of 77.7 crore shares. The company sold 21.8 crore shares of Zomato just ahead of the food aggregator’s IPO in July 2021. Alipay sold almost half of its stake in Zomato, or 26.3 crore shares, worth Rs 1,631 crore last year. It currently holds 29.6 crore shares.
This is not the first time that a Chinese company has sold their stakes in an Indian company. In August, China’s Antfin sold a 10.3% stake in Paytm.
In October, Japan’s SoftBank sold a 1.1% stake in Zomato. SoftBank also sold its stake in Paytm, and Warren Buffett-led Berkshire Hathaway exited Paytm by selling its entire 2.46% stake in the company.
The development comes a few hours after news agency Reuters reported that the Alibaba Group-owned payments company will offload its entire 3.44% stake in the deal.Bank of America and Morgan Stanley are advisers on the deal and it is likely to be executed later this week on Indian exchanges.
Why Alipay is selling its stake
Zomato shares have surged more than 90% this year and Alipay “wants to cash out … the (market) timing is good,” the publication quoted one of the three sources it talked to earlier. The block deals are set to be executed at Rs 111.28 per share, which is a 2.2% discount to Zomato’s close on Tuesday.
Alipay invested $360 million in Zomato in 2018 for a total of 77.7 crore shares. The company sold 21.8 crore shares of Zomato just ahead of the food aggregator’s IPO in July 2021. Alipay sold almost half of its stake in Zomato, or 26.3 crore shares, worth Rs 1,631 crore last year. It currently holds 29.6 crore shares.
This is not the first time that a Chinese company has sold their stakes in an Indian company. In August, China’s Antfin sold a 10.3% stake in Paytm.
In October, Japan’s SoftBank sold a 1.1% stake in Zomato. SoftBank also sold its stake in Paytm, and Warren Buffett-led Berkshire Hathaway exited Paytm by selling its entire 2.46% stake in the company.
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