Looking to cash in on the e-commerce boom, Reliance Capital is all set to sell its 16 per cent stake in travel portal Yatra.com for an estimated Rs 500 crore ($80 million) and is in talks with two-three international investors.
The deal would mark an over 12x appreciation for this investment by Reliance Capital, the financial services arm of Anil Ambani-led business conglomerate Reliance Group, which had acquired a 16 per cent stake in the online travel company for Rs 40 crore in 2006.
Sources said Reliance Cap is in talks with two-three international investors to sell the 16 per cent stake for an estimated $80 million. The identity of the interested buyers could not be ascertained.
When contacted, a Reliance Capital spokesperson said: “We continuously evaluate opportunities to unlock the value of our minority investments to enhance shareholders value.”
While the spokesperson did not give further details, sources said Reliance Cap aims to close the transaction in four-six weeks and the deal would put the total valuation of Yatra.com at around $500 million (Rs 3,000 crore).
Other existing investors in Yatra.com, which has film star Salman Khan as one of its brand ambassadors, include Norwest Venture Partners (30 per cent), TV18 group (10 per cent), Intel Capital (7 per cent) and Valiant Capital (10 per cent).
The management team has also got 6 per cent ownership.
Among these, TV18 group is now majority owned by Mukesh Ambani-led Reliance Industries group.
In the fast-growing Indian online travel business, Yatra.com competes with NASDAQ-listed MakeMyTrip, which commands a market value of $1.2 billion.
During the last fiscal 2013-14, MakeMyTrip is estimated to have clocked total transaction value of $1.38 billion on its platforms, as against $763 million by Yatra.
The operating income of MakeMyTrip and Yatra stood at $116 million and $51 million, respectively, for the year.
Reliance Capital recently announced its plans to focus on core business and is in the process of encashing its minority investments.
It also recently exited from the day-to-day operations of its global film and media services business, by merging its global film and media services business with Prime Focus.
The deal created the world’s largest media services power house, with an order pipeline of Rs 2,000 crore, over 5,500 employees and operations in the US, the UK, Canada, China and Singapore, besides India.
Reliance MediaWorks and Prime Focus promoters infused fresh equity capital of Rs 120 crore each into Prime Focus.
A number of international investors have recently pumped funds in Indian e-commerce or e-retail companies. These include Singapore’s state-owned investment company Temasek Holdings and asset management firm BlackRock along with other investors investing $100 million in Snapdeal. Japan’s SoftBank also invested $627 million in Snapdeal.
Flipkart has also recently received as much as $1 billion in fresh capital from investors.