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Alibaba & Ant Financial Largest Investors In India's Paytm

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In a joint statement, Alibaba Group Holding LimitedBABA and One97 Communication, Paytm's parent company, announced that Alibaba and Ant Financial have agreed to increase their investment in Paytm.

Ant Financial, Alibaba's payment arm, initially invested $575 million in Paytm in Feb 2015 for a 25% stake in One97 Communications.

After the completion of the latest transaction, Alibaba Group will become a direct investor in Paytm.

The terms of the deal have not been undisclosed. However, according to India's Economic Times, Alibaba will invest $680 million to buy 20% of Paytm. Also, this will lower Ant Financial's stake from 25% to 20%.

This investment will help Paytm speed up scale and compete with Snapdeal, Flipkart, and Amazon AMZN .

Also, Paytm is undertaking new initiatives like banking, building a marketplace and distributing financial services. These new initiatives require investment, and this round will help Paytm in this.

Going Ahead

Last month, Alibaba invested in Snapdeal, but its larger shareholding in Paytm clarifies that it will bank mainly on the mobile wallet and e-Commerce company to boost growth in India.

"India is an important emerging market with strong e-Commerce potential, and we look forward to partnering with Paytm to deliver innovative products and services to consumers," commented Daniel Zhang, Alibaba Group's CEO, in the statement.

Alibaba currently has a Zacks Rank #3 (Hold).

Some stocks in the same space that investors may consider are Stamps.com Inc. STMP and Travelport Worldwide Limited TVPT . Both the stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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