Chinese payments group Alipay is reportedly planning to divest its entire 3.44% stake in the foodtech major Zomato through block deals, with an approximate value of $400 million.
According to sources cited by Reuters, the advisory roles for the deal are held by Bank of America and Morgan Stanley, and the transaction is expected to be carried out later this week.
The development comes as Zomato’s shares experience a significant upswing in the wake of the company turning profitable over the last few months. In total, the shares have surged by over 90% so far this year.
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The transactions are purportedly scheduled to be completed at INR 111.28 per share, representing a 2.2% discount to Zomato’s closing price on Tuesday (November 28). The company’s shares concluded today’s trading session at INR 113.8 on the BSE.
Around the same time last year, Alipay divested nearly half of its Zomato stake, equivalent to 26.3 crore shares valued at INR 1,631 crore, in a bulk deal. Presently, the company retains 29.6 crore shares in Zomato, and it is anticipated that these remaining shares will be entirely liquidated.
In 2018, Alipay made an initial investment of $360 million in the Indian foodtech major, holding a total of 77.7 crore shares. In preparation for Zomato’s IPO in July 2021, Alipay divested 21.8 crore shares.
The recent development coincides with a period in which several Chinese investors have been divesting their holdings in publicly listed Indian companies. This trend is attributed to the ongoing border tensions between New Delhi and Beijing, leading to increased scrutiny of Chinese investors in India.
In August of this year, Antfin offloaded a 10.3% stake in Paytm, a transaction subsequently acquired by Vijay Shekhar Sharma, the founder, and CEO of the fintech giant.
Meanwhile, numerous international investors have been divesting their holdings in listed Indian startups such as Zomato and Paytm, capitalizing on the surge in value seen in new-age tech stocks this year.
As SoftBank continues to divest its holdings in Zomato and Paytm, Berkshire Hathaway, led by Warren Buffett, recently exited Paytm by selling its complete 2.46% stake in the company last week.
