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A worker displays a Micromax mobile phone inside a store in Kolkata, India, Dec. 4, 2013. Micromax, India's No. 2 smartphone maker, will increasing competition as Xiaomi Inc. pushes into the market with phones such as the Mi4i, with many high-end features at midrange prices. Reuters/Rupak De Chowdhuri

Alibaba Group Holding Ltd., which has invested in Xiaomi’s rival Meizu Technology Corp. in China, is leading a consortium that is close to buying a 25 percent stake in Micromax Informatics Ltd., signaling the Chinese e-commerce giant’s intent in having a say in a smartphone company in India.

Micromax is India’s largest smartphone seller behind Samsung Electronics Ltd. and commands nearly a fifth of the market. News of the talks was reported by Economic Times on Monday, citing five people familiar with the development. Micromax is seeking a $5 billion valuation for the investment, the report said.

For Alibaba, which already has invested in a mobile payment startup in India through its ANT Financial unit, India represents the next billion customers for its ambition of becoming a global ecosystem of wireless devices and cloud-driven software and services.

Xiaomi, after launching its latest smartphone from India, has clinched an investment from Ratan Tata, former chairman of the Tata Group, which will help it gain visibility and respectability as a brand in India.

“Tata is one of the most well-respected business leaders in the world. An investment by him is an affirmation of the strategy we have undertaken in India so far. This is just the start of an exciting journey, and we are looking forward to bringing more products into India,” Xiaomi’s CEO Lei Jun said on the company’s official Facebook India page.

Lei has said he aims to make Xiaomi one of the top smartphone companies in India in three years. He also expects revenues from Internet services this year to triple from the last to $1 billion, as the 5-year-old company adds more services of the type that Alibaba and Tencent Holding Ltd. provide.