Reliance capital has sold its nearly 1 percent stake in popular digital payments firm PAYTM for Rs 275 cr to china's giant group Alibaba.

The financial services arm of the reliance group has initially invested Rs. 10 cr for this stake in paytm. The deal will give a boost to paytm's valuation at $4billion, backed by Alibaba group as the strategic investor.

According to sources, Reliance capital retained a stale in paytm due to its investment in the parent firm. In the latest fundraising trip, Paytm valued at $1 billion.

Earlier, Reliance Capital had said it would trim its proprietary investment portfolio as part of its plans to monetise non-core assets. In December last year, Paytm founder and CEO Vijay Shekhar Sharma had sold 1 percent of his holding in One97 Communications, the parent firm of the digital payments firm, to raise about Rs 325 crore. This money was to be pumped into the group's payments bank operations, which are slated to commence soon. Alibaba Singapore E-commerce, along with investment firm SAIF Partners, is also slated to invest USD 200 million in Paytm's online marketplace unit. 

It was released by reliance earlier that it would reduce its portfolio investments as part of its plans to monetise non-core assets. last December, CEO & Founder Vijay Shekhar Sharma reduced its 1 percent stake in One97 Communications (the parent firm), to raise about Rs. 325 crore as to route this money into the group's payments bank operations which are to start-up soon. Alibaba Singapore e-commerce and SAIF investments, are to invest $200million in Paytm's online marketplace unit.

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