CHINESE e-commerce giant Alibaba Group Holding Ltd. and its financial services affiliate are in advanced talks to buy a stake for about US$550 million in India’s One97 Communications, which owns an online payment platform, sources directly involved in the transaction said.

    The investment by Alibaba, the world’s largest e-commerce company, is expected to be announced by the end of this month. It will be Alibaba’s first significant investment in India’s rapidly growing online business segment.

    Under the terms of the deal, Alibaba and Zhejiang Ant Small & Micro Financial Services Group, which runs China’s top payment service provider controlled by Alibaba’s executive chairman Jack Ma, will hold between 30 percent and 40 percent of One97 after the investment, the sources said.

    One97 runs Paytm, an e-commerce platform which consumers can access through mobile apps.

    One97 would issue fresh shares to Alibaba and Zhejiang Ant, which would result in the holdings of existing shareholders, including founder Vijay Shekhar Sharma, being diluted, one of the sources said.

    Other investors of One97 include SAIF Partners, Intel Capital and SAP Ventures, according to its website. Paytm has more than 20 million registered users, it said.

    The investment will be used to expand Paytm services, with a view to dominate the online payment business that is expected to grow rapidly in the next few years in India, one source said.

    A spokeswoman for One97 said the company is in the process of raising money.

    Foreign investors, including Japan’s SoftBank Corp. and Temasek Holdings Pvt Ltd., have invested billions of dollars in Indian e-commerce firms.

    (SD-Agencies)