The Indian business rumour mill is currently hot with the news that Reliance Capital is contemplating selling its 1 per cent shareholding in the Delhi NCR-based payment and commerce company Paytm for a whopping amount of USD 50-60 million. Alibaba-backed Paytm, which is one of biggest gainers of the Indian government’s demonetisation drive, was valued at USD 4.8 billion in its last big round of funding.
According to some sources, Reliance Capital is mulling the idea of raising about USD 50-60 million by selling its share in Paytm’s parent company One97 Communications.
Reliance Capital, which is a constituent of CNX Nifty Junior and MSCI Global Small Cap Index, is a part of the Reliance Group. It is amongst India’s leading and most valuable financial services companies in the private sector.
While both Reliance Capital and Paytm are completely tight lipped about the news, sources say that Reliance Capital is already in talks with some interested parties.
According to some noises in the market, Reliance Capital has in fact already narrowed in on a buyer and it is none other than Chinese e-commerce giant Alibaba.
Reliance Capital had recently announced that it is planning to reduce its proprietary investment portfolio as part of its strategy to monetise non-core assets. The company had recently sold its telvision and radio businesses. For now, the company wants to stay focussed on its financial services business.
Reliance Capital has a net worth of Rs. 15,390 crore (US$ 2.3 Billion) and total assets of Rs.67,112 crore (US$ 10.2 Billion) as on March 31, 2016.
Paytm founder and CEO Vijay Shekhar Sharma had recently sold his 1 per cent holding in One97 Communications to raise about Rs 325 crore. The money was intended to be put into the group’s payments bank operations which are expected to commence by the end of this month.
Apart from the Paytm deal, Reliance Capital is also planning to demerge its home finance and commercial finance businesses. The company hopes to raise around Rs. 450-550 crore by the end of current financial year.