Will Alibaba crash impact Indian e-comm valuation?
Digbijay Mishra
New Delhi:
When Alibaba listed on NYSE a year ago, it created history with the highest share sale value, making the Chinese e-commerce giant valued at around $230 billion. A year on, the company might create history again but this time, for the wrong reasons. Its scrip has nosedived close to 40% from its opening price and is now trading at almost $60 mark now.
Fuelling the panic is a report by Barron's which predicts the stock price could crash by 50%. So, will Indian e commerce bear the brunt of Alibaba's stock crash? It's a verity that a substantial chunk of the euphoric rise of investor confidence resulting into big fat cheques to Indian entrepreneurs was driven by Alibaba's success and the promises it held. Both investors and entrepreneurs in India have been vocal about being inspired from the Alibaba story and many are trying to copy its model.
In fact, one if the biggest investors in India's consumer Internet story is Japanese giant SoftBank. Billionaire Masayoshi Son-led Softbank's 32% stake in Alibaba provided it with a war chest to aggressively strike deals, boosting valuations of Indian as well as broader Asian startup ecosystem.
Going by last 18 months, Indian e-commerce has been all about blockbuster funding, sky soaring valuations but the plot is changing now in India. Investors are being cautious and big e commerce companies are finding it strenuous to raise larger rounds of funds to meet working capital demands.
