Alipay exits India: Chinese payment giant to sell Zomato stake for nearly $400 million

Alipay, the Chinese payments group, is set to divest its 3.4% stake in the Indian food delivery powerhouse Zomato for an estimated sum of almost $400 million. This move is expected to be executed through block deals on Indian stock exchanges. The deal, for which Bank of America and Morgan Stanley are serving as advisers, is anticipated to take place on Indian exchanges in early December 2023.

Zomato, Bank of America, Morgan Stanley, and Alipay have not yet confirmed any divestment that is set to occur.

Zomato shares have experienced a remarkable surge of over 90% in 2023, rebounding from a decline of more than half in 2022 amid global struggles in the tech stock sector. Alipay is looking to capitalize on the favorable market conditions, alluding to the significant recent upswing in Zomato's share value.

The block deals are slated to occur at Rs 111.28 per share, representing a 2.2% discount to Zomato's closing price on Tuesday, 28 November 2023. Notably, in October 2023, Japan's SoftBank divested a 1.1% stake in Zomato, as the demand for online ordering continues to surge, prompting robust expansion strategies by companies.

The decision by Alipay to exit Zomato aligns with a broader trend of Chinese investors reducing their holdings in Indian firms. In August 2023, China's Antfin sold a 10.3% stake in the Indian financial giant Paytm, reflecting a pattern of shifts in investment strategies in the Indo-Chinese business landscape.