Another Chinese Exit; Alipay To Sell Remaining 3.4% Stake In Zomato

SUMMARY

Alipay is expected to sell its stake in Zomato for about $400 Mn through block deals this week at INR 111.28 per share

Shares of Zomato have rallied significantly over the last few months on the back of it turning profitable and have gained over 90% so far this year

Earlier this year, China’s Antfin sold its 10.3% stake in Paytm to founder Vijay Shekhar Sharma

Chinese payments group Alipay is reportedly planning to sell its entire 3.44% stake in foodtech major Zomato in block deals for about $400 Mn.

Bank of America and Morgan Stanley are the advisers for the deal, which is likely to be executed later this week, Reuters reported citing sources.

The development comes on the back of shares of Zomato witnessing a massive rally over the last few months on turning profitable. Overall, the shares have gained over 90% so far this year.

The deals are reportedly set to be executed at INR 111.28 per share, a discount of 2.2% to Zomato’s close on Tuesday (November 28). The company’s shares ended today’s session at INR 113.8 on the BSE.

Alipay had sold almost half of its stake in Zomato, or 26.3 Cr shares, worth INR 1,631 Cr in a bulk deal around the same time last year. Currently, the company holds 29.6 Cr shares in Zomato, which are now expected to be completely offloaded.

Alipay initially invested $360 Mn in the Indian foodtech major in 2018 and held a total of 77.7 Cr shares at that time. Just ahead of its IPO in July 2021, it sold 21.8 Cr shares of Zomato.

The latest development comes at a time when a number of Chinese investors have been selling their stake in listed Indian companies amid the border tensions between New Delhi and Beijing, which have also resulted in heightened scrutiny of Chinese investors in India.

In August this year, Antfin sold a 10.3% stake in Paytm which was acquired by the fintech giant’s founder and CEO Vijay Shekhar Sharma.

Meanwhile, multiple foreign investors have been offloading their stakes in listed Indian startups like Zomato and Paytm to make the most of the rally in the new-age tech stocks this year.

While SoftBank has been selling its stake in Zomato and Paytm, Warren Buffett-led Berkshire Hathaway exited Paytm by offloading its entire 2.46% stake in the company last week.