Alibaba to buy a fourth of Micromax’s stake to enter India’s fastest-growing smartphone market

The deal market is buzz with acquisitions and mergers. Of late, overseas investors have shown interest in acquiring stake in Indian companies. And now, domestic handset manufacturer Micromax is on the brink of striking a deal to sell a fourth of itself to Chinese eCommerce company Alibaba for Rs 4,200 crore.
The deal, which would be the first such stake purchase in an Indian phone-making company by an overseas investor, would allow Alibaba to gain entry into one of the world's fastest-growing smartphone market, as per an Economic Times report.
Three persons aware of the development told ET, the deal involves the stake sale of 20-26% to Alibaba Group Holding, which provides consumer-to-consumer, business-to-consumer and business-to-business sales services via web portals. Besides, it is likely to value Micromax at around $3.5 billion (Rs 21,000 crore) inclusive of debt, they added.
An announcement regarding this deal is expected to take place soon as the legal documentation is getting finalised. One of three people also mentioned that this deal may also see the participation of Japanese telecom firm SoftBank as it has a 32% stake in Alibaba.
If we believe this report by the leading financial daily, China’s largest e-tailer Alibaba and Japan’s SoftBank are being guided by Citigroup while Micromax is seeking advise from Goldman Sachs. However, Alibaba, SoftBank and Micromax haven’t yet responded to these market speculations. (Image: The Economic Times)