Dallas, Texas 06/25/2015 (Financialstrend) – In what is seen as the ‘first-ever’ stake investment in indigenous Indian phone maker, Micromax, Alibaba Group Holding Ltd (NYSE:BABA) will now own one-fourth of the former for $700 million. Though three sources have independently confirmed such a move, by the Chinese e-Commerce giant, there is no official confirmation from the company yet.
Such an investment from the e-giant would bring it 20% to 26% stake ownership, in one of India’s best-known locally groomed smartphone maker, Micromax. Alibaba, which besides its e-commerce platform, also has several e-services running successfully in China, with massive subscriber participation in each of the services. From rental or real estate services to online Payment service, Alipay, Alibaba Group Holding Ltd (NYSE:BABA) has come to dominate Chinese commerce in the digital format.
Therefore, any invest the company makes in overseas markets is widely evaluated. Similarly, its sudden interest in Indian phone maker Micromax has definitely set the technology world in India and the sub-continent agog.
India is currently a market seen as the fastest growing for handsets. By owning a part of India’s number two handset maker, Micromax, Alibaba Group Holding Ltd (NYSE:BABA) could gain access to this fast-growth market. Micromax is valued at $3.5 billion, along with debt. Currently, Micromax is calling such news reports as ‘market speculation.’
Alibaba Group Holding Ltd has been investing in India as per a strategic plan. In February, via its US-financial affiliate, Ant Financial Services, it bought 25% stake in an online mobile payment platform, Paytm, owned by One97Communications Ltd.
Micromax stake is currently held by four of its founder members, nearly 80% of the stock, while the remaining 20% is held by employees as well as private equity funds. Such large infusion of funds will allow Micromax to expand into newer areas it has been targeting, personal computing via customizable apps and other services.