China’s ecommerce giant Alibaba has reportedly ended talks with Micromax, the country’s second largest smartphone maker, to acquire a stake of up to 20 percent, at a valuation of more than $3 billion.
According to a FT report, the Chinese company has further delayed other investment plans in India amid problems in its home market, including regulatory probes over fake merchandise sold on its sites.
Alibaba is currently grappling with China’s slowing economy and regulatory probes. The company, which recently increased stakes in local start-ups PayTM and Snapdeal, had plans to invest in entertainment and services businesses in India, besides exploring minority stake in Micromax, the report added.
Alibaba has so far spent $680 million for a 40% stake in Indian payments start-up PayTM, and picked up a smaller holding in Snapdeal.
“They have become much less aggressive. As well as Micromax, they had plans to invest in entertainment and services businesses in India but they are fine without it for now,” a person familiar with the development told the publication.
The Chinese company it is now taking a gradual approach in India, and still keen on expanding operations in India.
Micromax’s four founders — Rahul Sharma, Rajesh Agarwal, Sumeet Kumar and Vikas Jain — own a little less than 80 per cent of the company. The handset maker earlier this year forced out the Chairman Sanjay Kapoor on charges of alleged financial irregularities.
However, Kapoor, had then said his “termination” was timed to deny him stock options (ESOPs), and is contesting the same and has threatened to sue the firm.