The headquarters of Alibaba Group Holding Ltd in Hangzhou, Zhejiang province. Zhejiang Ant Small & Micro Financial Services Group Co, an affiliate of Alibaba, has agreed to buy 25 percent of Indian payment services provider One97 Communications. [Photo/Xinhua]

An investment in an Indian payment service provider made by Zhejiang Ant Small & Micro Financial Services Group Co, an affiliate of Alibaba Group Holding Ltd, has two goals.

One is to get a share of the e-payment market in India, while the other is for parent Alibaba to expand into that country's underdeveloped e-commerce sector.

The Hangzhou-based Ant Financial has agreed to buy 25 percent of Indian payment services provider One97 Communications, tapping into the potentially huge online retail market in India, according to a statement on Thursday.

The companies did not reveal the size of the investment, but a person who is familiar with the deal said the stake was worth more than $500 million, Reuters reported on Friday.

One97 runs Paytm, an online platform through which users can shop or pay utility bills.

Ant Financial runs Paytm's Chinese peer Alipay, which has 190 million mobile users.

By contrast, Paytm has just 23 million users of its mobile payment service in India.

Under a strategic partnership agreement, Ant Financial will offer strategy and technology support to Paytm.

By leveraging Alipay's technology and experience, Paytm has the potential to be as dominant in India as Alipay is in China, said analysts.