China's Tencent buys stake worth ₹2,060 crore in Flipkart from Binny Bansal
Chinese technology conglomerate Tencent has bought stake worth USD 264 million (about ₹2,060 crore) in Flipkart from its co-founder Binny Bansal through its European subsidiary, according to official documents.To get more latest news about tencent, you can visit shine news official website.
Bansal holds around 1.84 per cent stake in Flipkart after selling part of his stake to Tencent Cloud Europe BV.
The transaction was completed on October 26, 2021 and was shared with the government authorities at the beginning of the current financial year.
Post the transaction, Tencent arm holds 0.72 per stake in Flipkart which is valued at around USD 264 million, as per last valuation of USD 37.6 billion disclosed by the e-commerce firm in July 2021.
The company's valuation surged to USD 37.6 billion after raising USD 3.6 billion (about ₹26,805.6 crore) in funding round led by Singapore's sovereign wealth fund GIC, CPP Investments, SoftBank Vision Fund 2 and Walmart.DisruptAD, Qatar Investment Authority, Khazanah Nasional Berhad as well as marquee investors Tencent, Willoughby Capital, Antara Capital, Franklin Templeton and Tiger Global also participated in the funding round.
The transaction between Bansal and Tencent took place after the July funding round.Sources said the transaction took place in Singapore but Flipkart informed Indian authorities about it as a responsible entity and that the transaction does not fall under purview of 'Press Note 3' which calls for scrutiny of investment that any Indian company gets from countries sharing land border with India.
While there are several companies operating in India in which Tencent has made investment, the government has banned some gaming apps including PUBG Mobile, PUBG Mobile Lite which were published by Tencent Group. E-mail query sent to Flipkart and Bansal did not elicit any reply.
The ongoing decline in shares of Tencent sets the stock up for its most compelling risk-reward profile since 2018, Goldman Sachs said in a note on Thursday.
Tencent has fallen 42% from its record high in mid-February, as Beijing authorities crackdown on a number of industries including the gaming sector. But the current crackdown has echoes of a tightening regulatory regime on the gaming sector in 2018, when game licenses were not approved by authorities for an extended period of time.
Tencent's stock went on to more than triple from its 2018 lows, which were sparked by the brief period of increased regulatory scrutiny from Beijing.
Now, a similar setup could be unfolding, as Goldman estimates that Tencent could surge 73% from current levels amid a stricter regulatory stance from Beijing. Tencent has paid an anti-trust fine and recently implemented an age limit for kids spending money in its games.Goldman observed that Tencent has made 168 investments year-to-date, which is more than double and triple the number of investments it made in 2020 and 2019, respectively. "Tencent is executing on its strategy to narrow the holdco discount by acquiring assets that result in higher earnings," Goldman explained.
"In our view, the risk-reward is the most attractive over multiple years as the share price move year-to-date mirrors 2018 when game licensing issuance came to an abrupt halt," Goldman concluded.Goldman reiterated its Buy rating for the gaming company and kept it on its conviction list.
Chinese technology conglomerate Tencent has bought stake worth USD 264 million (about ₹2,060 crore) in Flipkart from its co-founder Binny Bansal through its European subsidiary, according to official documents.To get more latest news about tencent, you can visit shine news official website.
Bansal holds around 1.84 per cent stake in Flipkart after selling part of his stake to Tencent Cloud Europe BV.
The transaction was completed on October 26, 2021 and was shared with the government authorities at the beginning of the current financial year.
Post the transaction, Tencent arm holds 0.72 per stake in Flipkart which is valued at around USD 264 million, as per last valuation of USD 37.6 billion disclosed by the e-commerce firm in July 2021.
The company's valuation surged to USD 37.6 billion after raising USD 3.6 billion (about ₹26,805.6 crore) in funding round led by Singapore's sovereign wealth fund GIC, CPP Investments, SoftBank Vision Fund 2 and Walmart.DisruptAD, Qatar Investment Authority, Khazanah Nasional Berhad as well as marquee investors Tencent, Willoughby Capital, Antara Capital, Franklin Templeton and Tiger Global also participated in the funding round.
The transaction between Bansal and Tencent took place after the July funding round.Sources said the transaction took place in Singapore but Flipkart informed Indian authorities about it as a responsible entity and that the transaction does not fall under purview of 'Press Note 3' which calls for scrutiny of investment that any Indian company gets from countries sharing land border with India.
While there are several companies operating in India in which Tencent has made investment, the government has banned some gaming apps including PUBG Mobile, PUBG Mobile Lite which were published by Tencent Group. E-mail query sent to Flipkart and Bansal did not elicit any reply.
The ongoing decline in shares of Tencent sets the stock up for its most compelling risk-reward profile since 2018, Goldman Sachs said in a note on Thursday.
Tencent has fallen 42% from its record high in mid-February, as Beijing authorities crackdown on a number of industries including the gaming sector. But the current crackdown has echoes of a tightening regulatory regime on the gaming sector in 2018, when game licenses were not approved by authorities for an extended period of time.
Tencent's stock went on to more than triple from its 2018 lows, which were sparked by the brief period of increased regulatory scrutiny from Beijing.
Now, a similar setup could be unfolding, as Goldman estimates that Tencent could surge 73% from current levels amid a stricter regulatory stance from Beijing. Tencent has paid an anti-trust fine and recently implemented an age limit for kids spending money in its games.Goldman observed that Tencent has made 168 investments year-to-date, which is more than double and triple the number of investments it made in 2020 and 2019, respectively. "Tencent is executing on its strategy to narrow the holdco discount by acquiring assets that result in higher earnings," Goldman explained.
"In our view, the risk-reward is the most attractive over multiple years as the share price move year-to-date mirrors 2018 when game licensing issuance came to an abrupt halt," Goldman concluded.Goldman reiterated its Buy rating for the gaming company and kept it on its conviction list.