Chinese e-retail giant Alibaba is in talks with Micromax Informatics to buy 20percent stake in the smartphone vendor.
According to a report in Reuters, Alibaba is likely to invest around $1.2 billion in Micromax for the stake, valuing the company at $5-6 billion. There is no word on how serious or at what stage the negotiations are right now. Micromax has also been in discussion with other firms like Japan’s Softbank for the share sale, but the Softbank talks failed on the valuation concerns.
Reuters notes that investment in Micromax will help Alibaba expand its presence in the Indian market, where it already owns 25percent stake in Paytm.
With Micromax delaying IPO plans, a stake sale is the only way for the firm to raise capital as it enters newer product segments.
Set-up in 2008, Micromax is the second biggest smartphone vendor in the country. The company primarily targets the entry-level buyers with affordable and aggressively priced devices. In addition to phones, the company also sells televisions, tablets, and data-cards.