Alipay, the top Chinese online payment solution company and part of the Alibaba Group has acquired a 25% stake in homegrown smartphone maker Micromax, as per The Economic Times.
The stake acquisition will bring Micromax’s valuation at 4-5 billion. As per the report, Alipay will bring two to three partners as it “will give divergence of views and comfort to the lead investor”. The deal will result into infusion of capital and exits that will be either partial or total, by existing investors, added the report. An exit will give existing investors significant returns on their investment.
“An investment committee of Micromax, comprising its promoters, top management and existing investors, will take a final call by the end of the first quarter. Once the deal is done, new entrants will get entry into the company’s board.”
a person familiar to the matter told the publication.
Nearly 80% of Micromax’s stake is controlled by the promoters and 15% held by TA Associates, Sequoia Capital and Sandstone Capital own 2.68% each while Madison India Capital has around 0.4%, said the report. 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.