Parent company One97 registers Paytm as a separate entity to allow potential Alibaba entry

Editor | Sep 09, 2020

Alibaba is paving the way for its entry into Indian ecommerce. We know that Alibaba is an important investor in Paytm’s parent company One97 Communications. According to a filing with the Registrar of Companies (RoC), One97 has created a separate account for Paytm (Paytm E-commerce Private Limited), so that it can be an individual entity. Vijay Shekar Sharma, founder of One97, is listed as the main shareholder. This move is apparently to prepare for Alibaba’s entry to Indian ecommerce.

A person close to the proceedings said under condition of anonymity,

“Paytm has already started talking to existing investors, including Alibaba Group, to infuse fresh capital in the new entity.”

Sharma said,

“Payments and e-commerce have different growth cycles and we believe e-commerce business can be a sizeable opportunity going forward,”

in a possible reference to Paytm’s origins as a mobile payment platform. However, this statement gives no clarity on Alibaba’s proposed entry.

Alibaba says, ‘open sesame’ to the Indian ecommerce market

Alibaba and Alipay hold a 41% share in One97, making them the majority shareholders of the company.

Alibaba has been working on its India entry for a while now. The company has invested in Snapdeal, apart from its share in Paytm. Last year, the company invested Rs 3,259 crore in Snapdeal jointly with SoftBank and Foxconn. Alibaba has also considered investing in Flipkart. Recently, it has also held talks with Shopclues to discuss a possible partnership.

The Chinese ecommerce giant is aggressive on its Indian debut. The company has already set up shop in the country with its logistics and payment arrangements, apart from getting a team ready. The recent developments indicate that a formal announcement from the company is only a few days away.


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