Alipay, a Chinese payments company, intends to divest its 3.4 percent ownership in Zomato, a prominent Indian food delivery company, for approximately $400 million (around Rs. 3,333 crore).
This will be achieved through block trades on Indian stock exchanges, as confirmed by three sources and verified by Reuters through the deal’s term sheet.
According to the term sheet reviewed by Reuters, Alipay, which is owned by Ant Group, would sell its whole 3.44 percent ownership in the sale.
Bank of America and Morgan Stanley are acting as advisors for the sale, which is expected to take place on Indian exchanges later this week, according to three anonymous persons familiar with the matter.
Zomato, Bank of America, and Morgan Stanley have not yet provided a response to a request for comment. Alipay did not provide a response during non-business hours.
The value of Zomato shares has experienced a significant increase of over 90 percent in the current year. This comes after a decline of more than 50 percent in 2022, a period marked by global challenges faced by technology firms.
The first source stated that Alipay intends to capitalize on the current favorable market conditions, as seen by the significant increase in Zomato’s share value in recent months.
According to the term sheet, the block sales would be carried out at a price of Rs. 111.28 per share, which is a 2.2 percent lower than Zomato’s closing price on Tuesday.
Japan’s SoftBank divested a 1.1 percent share in Zomato, India’s largest food delivery business, in October. The demand for online ordering has experienced significant growth in recent years, leading companies like as Zomato to pursue aggressive expansion strategies.
Alipay’s withdrawal from Zomato coincides with the reduction of investments by other Chinese investors in Indian enterprises. Antfin, a Chinese company, divested a 10.3 percent ownership interest in Paytm, a prominent financial institution in India, during the month of August.
Zomato and other technology stocks have had a resurgence following a significant decline last year during a market downturn. During this period, investors also expressed concerns about the excessively high valuations of certain Indian businesses that had recently gone public.
