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Ant Group’s IPO documents indicate its joint control in Indian payments firm Paytm

Written by Moulishree Srivastava Published on 

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Indian technology companies have been trying to distance themselves from their Chinese backers amidst the ongoing political tension.

Ant Group, an affiliate of Chinese e-commerce giant Alibaba, may have made things uneasy for its Indian portfolio company One97 Communications, which operates Paytm, the country’s largest wallet and payment service.

In the papers filed by Ant Group for a dual listing in Hong Kong and Shanghai’s STAR market on Tuesday, the company said with stakes of over 30% in One97 Communications, it has joint control in the Noida-headquartered firm.

“Our major associates include One97 Communications Ltd that operates Paytm, our e-wallet partner in India, in which we held a 30.33% equity interest,” Ant Group said in its filing. “Entities over which we have significant influence or joint control are classified as associates or joint ventures.”

At 30.33%, Ant Group’s stake in Paytm, India’s most valuable startup at USD 16 billion, is calculated to be around USD 5 billion.

In its filing, Ant Group also mentioned it holds a 25% stake in Gurugram-based food-delivery startup Zomato. However, due to Indian government’s new FDI regulation passed in April this year, which put a roadblock to investments from China, Zomato couldn’t receive USD 100 million from Ant, which was part of its USD 150 million funding announcement in January.

“Separately, in 2020, a change in foreign investment regulation in India led to our further evaluation of the timing of our additional investment in Zomato,” it said in its filing.

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Read this: Mobile payment users to reach 800 million in India by 2025

The relationship between Asia’s two major economies was soiled after political tensions over the disputed border heated up leading to a clash at the border. Subsequently, a lot of Indians took to social media to boycott Chinese brands and support homegrown products and services. Later that month, India banned 59 Chinese apps including ByteDance-owned TikTok, a popular short-video app, citing user privacy and data security concerns.

To avoid the ire of its millions of users, Paytm has been trying to push the narrative that it’s an Indian company and not a Chinese one. Paytm founder and CEO Vijay Shekhar Sharma had even publicly supported India’s decision to ban Chinese apps. But netizens were quick to criticize him, pointing out Paytm’s dependence on investment from China.

Apart from Paytm, other Indian technology companies have also been trying to distance themselves from their Chinese backers amidst the ongoing political tension.

In a recent interview with local media Economic Times (ET), Kunal Bahl, co-founder and CEO of Alibaba-backed e-commerce platform, Snapdeal, said the Chinese e-commerce behemoth holds less than a 3% stake in Snapdeal and highlighted that it has no role in Snapdeal’s operations or governance.

They are “passive, financial investors who have never had any role in the governance or operations of Snapdeal,” Bahl told ET.

Earlier in July, Indian online insurance marketplace Policybazaar CEO, Yashish Dahiya, told local media Times of India (ToI) that if given a chance, he is ready to buy back the 10% stake that Tencent owns in Policybazaar parent EtechAces.

Tencent had bought a 10% equity share in Policybazaar for USD 150 million at the valuation of USD 1.5 billion in November last year.

Since 2014, Chinese investors such as Alibaba, Shunwei Capital, Tencent, ByteDance, among others have pumped in almost USD 5.82 billion in Indian startups, according to the Chennai-based research firm, Venture Intelligence. More than half of the 25 Indian unicorn companies, including Paytm, Policybazaar, Byju’s, Swiggy, and others, have Chinese investors on their cap table.

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