The much-touted proposal of Chinese giant Alibaba's stake purchase in Indian e-commerce firm Snapdeal may have "fallen off" due to high valuations being sought by the homegrown online marketplace.
The deal, which was being pegged at about $500-700 million, has hit a roadblock due to a high valuation demanded by Snapdeal, sources said.Both the companies declined to comment on the matter, but sources said that Alibaba was valuing the Indian firm in the range of $ 4-5 billion as against a valuation between $6-7 billion sought by Snapdeal.
The stake purchase in Snapdeal would have given Jack Ma-led Alibaba a stronger footing in the Indian market, which has one of the largest Internet population globally. Alibaba's talks with Snapdeal for acquiring a stake in the firm have broken down," a person in know of the developments said. Alibaba has been expanding its presence in India, including through acquisitions.
last month, Ant Financial Services -- part of the Alibaba Group -- said it will acquire 25 per cent stake in One97 Communications, the parent of mobile commerce firm Paytm. A US-based investment banker said while private equity and venture firms are "hugely" interested in investing in e-commerce in India, they are adopting a cautious approach as they feel valuations are being "pumped up" to "exorbitant" levels.