Alibaba looks to buy 20% stake in Micromax for $1.2 billion: report

Chinese e-commerce giant Alibaba Group Holding is in talks with India's Micromax Informatics to buy a 20-per cent stake in the fast growing smart phone maker and thereby increase its presence in India's expanding e-commerce space, reports said today.

Micromax is reported to have initiated talks with Alibaba on the stake sale after differences in valuations stalled discussions with investors led by Japanese telecoms firm Softbank Corp.

"The Softbank talks are not officially over, but it'll be hard to get back on track," the report quoted a source as saying.

Currently, Softbank is the largest shareholder in Alibaba. The talks with Softbank are also not officially over, but it'll be hard to get back on track, the reports quoted sources as saying.

The reports said Alibaba wants to use the Micromax deal to tap into the internet boom in India, which is also one of the world's most rapidly growing smart phone markets.

A stake in Micromax will help Alibaba to tap into both the mobile phone market and mobile transactions in India.

Also, it was the strength of revenue from mobile transactions that helped the company report a 45 per cent increase in quarterly revenue.

With the acquisition of a stake in Micromax, Alibaba would be able to roll out services such as Alipay, its online payment platform, on Micromax phones.

Ant Financial Services Group, which owns Alipay, is China's largest payment service provider and is controlled by Alibaba's executive chairman and founder Jack Ma.

Micromax is looking at a stake sale to raise capital as it expands into new business segments including personal computing.