China’s e-commerce giant Aibaba Group is looking forward to buy a 20% stake in homegrown smartphone maker Micromax, as per a latest report from Reuters.
The report said that the stake acquisition will see Alibaba investing about $1.2 billion in Micromax. This will make the India’s second-largest smartphone brand to be valued of up to $6 billion. Micromax and Alibaba began talks on the stake sale after discussions with investors led by Japanese telecoms firm Softbank Corp halted owing to differences in valuations, added the report. The sources said Alibaba wants to use the Micromax deal to tap the growing number of internet users in India, which is also one of the world’s most rapidly growing smartphone markets.
Moving on the report said that Alibaba may roll out services such as Alipay, on Micromax phones with this stake acquisition. The investment is aimed at helping Micromax raise capital as it expands into new business segments including personal computing. Micromax is currently the second largest smartphone maker in the India and is facing tough competition from Chinese company Xiaomi, Asus, Lenovo, Samsung and others.
A different ET report in April had said that Alipay, the online payment solution company and part of the Alibaba Group has acquired a 25% stake in Micromax. Today, a PTI report said that Micromax is eyeing to investment $400 million in 20 start-ups.