The Alibaba Group is pouring more money into Indian payments powerhouse Paytm, with one report putting the investment at the equivalent of about $680 million, giving Alibaba control of 20% of Paytm's parent company, One97 Communications.

Due to the way the investment was structured, Alibaba's share of the Paytm parent company actually dropped from about 25%, following an initial investment earlier this year, according to a report in The Economic Times. The deal, which also involves Alibaba's payments arm, Ant Financial, is complicated because there are multiple deals involving multiple related companies.

In February, Ant Financial had picked up a 25% stake for $575 million, of which $200 million came in as the first tranche, said the Economic Times report, adding the fresh investment by Alibaba Group Holdings subsumes the outstanding tranche of $375 million, and will see Ant Financial's stake being lowered to 20%. With this, Alibaba will become the biggest shareholder in the company as it will hold 40% through Ant and Alibaba, and Paytm will be its e-commerce play in India.

That story also said that the new money will be used for "developing technology, increasing workforce, building expertise in the online-to-offline business model besides massive marketing and expanding operations."

Alibaba's efforts to move outside China typically rely on partnerships. The company and its payment affiliate, Alipay, have reportedly been working on collaborations with Apple and PayPal. And Alibaba is working directly with U.S. merchants to provide them a way to sell to Chinese residents. Alibaba has already used its investment in Paytm to reach restaurants in India, among other merchants.

Alibaba and Paytm issued a statement saying that the further investment signifies the importance of the Indian payments space.

"Ant Financial has worked seamlessly with Paytm in the past few months and our technical teams have developed significant improvements on the user experience for Indian consumers," said Eric Jing, President of Ant Financial Services Group said. "Ant Financial and Paytm will collaborate to capture mobile payment opportunities in India. We believe that Paytm, as a leader in this field, is best equipped to build a mobile payment ecosystem in the country."

In related Alibaba news, Yahoo, despite resistance from the U.S. Internal Revenue Service to Yahoo's plan for a tax-free spinoff of its Alibaba stake, said in a federal filing on Monday that it is still exploring such an option. Yahoo has created an investment company called Aabaco, which Yahoo said "which will hold all of Yahoo’s remaining holdings in Alibaba Group Holding Limited and Aabaco Small Business, LLC, a newly formed entity that will own Yahoo Small Business."

"On September 23, 2015, Yahoo’s Board of Directors authorized the Company to continue to pursue the plan for the Aabaco spin-off transaction as previously disclosed, except that completion of the spin-off will not be conditioned upon receipt of a favorable ruling from the IRS," Yahoo said in its SEC 8-K filing. "The spin-off transaction will continue to be subject to certain other conditions, including final approval by Yahoo’s Board of Directors, receipt of a legal opinion with respect to the tax-free treatment of the transaction under U.S. federal tax laws and regulations, the effectiveness of an applicable registration statement filed with the Securities and Exchange Commission (“SEC”) and compliance with the requirements under the Investment Company Act of 1940, and other customary conditions, each of which conditions may be waived, in whole or in part (to the extent permitted by law), by Yahoo in its sole discretion."

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