Chinese payments group Alipay, a subsidiary of Ant Group, is set to sell its complete 3.4 percent stake in Zomato, India’s leading food delivery platform, for nearly $400 million. The sale is expected to take place through block deals on Indian stock exchanges, according to sources familiar with the matter and a Reuters review of the deal’s term sheet.
Bank of America and Morgan Stanley are acting as advisers for the deal, which is likely to be executed later this week on Indian exchanges, anonymous sources revealed.
Zomato, Bank of America, and Morgan Stanley have not yet responded to requests for comments on the matter. Alipay has also remained silent on the issue outside of regular business hours.
Zomato’s shares have experienced significant growth, surging more than 90 percent this year, rebounding from a challenging period in 2022 when tech stocks faced challenges globally.
The block deals are expected to be executed at a price of INR 111.28 per share, representing a 2.2 percent discount to Zomato’s closing price on Tuesday, as per the term sheet.
The decision by Alipay to divest its stake in Zomato aligns with the broader trend of Chinese investors reducing their holdings in Indian companies. In October, Japan’s SoftBank sold a 1.1 percent stake in Zomato, the largest food delivery service in India. The increasing demand for online food delivery services has prompted companies like Zomato to aggressively expand their operations.
This move by Alipay follows the trend of other Chinese investors reducing their stakes in Indian companies. In August, China’s Antfin sold a 10.3 percent stake in the Indian financial giant Paytm.
Tech stocks, including Zomato, have experienced a rebound after facing challenges in the previous year during a market meltdown. Investors had raised concerns about the high valuations of some Indian startups that made their stock market debuts in recent years.