Today is quite an important day in terms of announcements. An Indian giant has invested in a Chinese one and a Chinese juggernaut has invested in an Indian tech giant.
To start off, Xiaomi has just announced that Mr. Ratan Tata, Chairman Emeritus of Tata Sons has invested an undisclosed amount in Xiaomi. The Chinese smartphone manufacturer is the third largest globally (largest in China) and this is the first investment in the company which has come in from an Indian.Xiaomi's share in the Indian smartphone market is increasing continuously with passage of time.
Its tech products (power banks, ear phones, Mi Pad, upcoming Mi Band) are fairly popular in the country too. Xiaomi just launched the Mi 4i globally through India which goes on to show how serious the company is about India. The investment from Mr. Ratan Tata will come with his years of expertise across a wide range of fields which will in turn be beneficial to Xiaomi. The Chinese OEM is trying to position itself as a technology company and not just a smartphone OEM. We may see its other products reaching us soon.
Alipay, the online payment solutions division of the popular Alibaba group seems to have just picked up a 25 percent stake in our very own Micromax as per a report on ET. The amount for which this investment has been undertaken is undisclosed too but is expected to value Micromax at $4-5 billion. Alipay plans to bring in 2-3 partners to the board with the investment which “will give divergence of views and comfort to the lead investor”. The investment will see some of the existing investors making an exit.
Currently, 80 percent of the company’s stake is in the hands of its promoters while 15 is controlled by TA Associates with Sequoia Capital and Sandstone Capital owning 2.68 percent each. Madison India Capital owns about 0.4 percent of the share.The deal is expected to be finalised by the end of this quarter post which all its details will be revealed to the public. Spreadtrum communications, an SoC manufacturer has also picked up a minority stake in Micromax for $10 million.
It has been quite an eventful day in terms of the announcements and from the looks of it, we like what we are hearing.