Alipay aquires 25% stake in Micromax

By on Email @exolete

Micromax Alipay

Alipay, the payment solution company which is a part of the Alibaba Group has acquired 25% stake in Micromax. The acquisition has been made with Micromax's valuation at USD 4-5 Billion.


Although not much is known officially about the deal, but according to sources of the Economic Times, Alipay will be bringing in two to three partners to the board, and the deal will culminate into partial or full exit of current investors in the company. Therefore, Alipay will be funding Micromax from here on.


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.


According to the report, about 80% of Micromax’s stake is controlled by its promoters, 15% is held by TA Associates while Sequoia Capital and Sandstone Capital own 2.68% each and Madison India Capital has about 0.4%. Rahul Sharma, recently started another subsidiary within Micromax dubbed YU Televentures which is its own separate entity. Considering all that is happening in the Indian smartphone space with new entrants like Xiaomi, Lenovo, Asus and even Motorola, Micromax has been pushed to the side.

Recently the company launched an ultra-cheap Android Lollipop running smartphone, the Canvas Spark for just Rs. 4999. This is the company's answer to the growing dominance of aforementioned brands. Although the deal is not yet final nor official, it clearly shows one thing, India is now a huge destination for foreign investment.


Source: Economic Times