Post Recent Upsurge, SoftBank Looking To Offload Zomato & Paytm Shares In Open Market

Japanese conglomerate SoftBank is reportedly planning to book profits by selling small stakes in Zomato and One97 Communications, the parent of Paytm, reaping benefits from the recent rally in these stocks which has turned them into profitable bets for the investor.

As per a Moneycontrol report, SoftBank may sell shares in small tranches in the open market instead of going for block deals.

It must be noted that the shares of Paytm and Zomato have been rallying sharply since the beginning of this month on the back of improved market sentiment about them due to these startups reaching their EBITDA profitability targets ahead of estimates.

SoftBank had paid around INR 65-INR 70 apiece for shares of foodtech major Zomato and INR 830-INR 840 per share for fintech giant Paytm. Currently, Zomato is trading at INR 74.34 and Paytm at INR 895.5. The shares have surged over 9% and 27%, respectively, since June 1.

In May this year, SoftBank’s SVF India Holdings (Cayman) offloaded over a 2% stake in Paytm, which was an aggregate of 13,103,148 equity shares in the fintech company. Earlier, the VC behemoth sold around 3 Cr shares in the startup worth $200 Mn in November last year in a bulk deal.

BSE data suggests that SVF India Holdings (Cayman) Ltd held 8.4 Cr shares in Paytm till February 18, 2023, or a 13.24% stake, which fell to 8.2 Cr shares, or a 12.88% stake, at March end. 

While Softbank has been offloading stakes via block deals in Paytm and PB Fintech, it has not sold stake in Zomato so far. As per BSE data, SoftBank’s SVF Growth (Singapore) Pte Ltd continued to hold a 3.36% stake in Zomato, or a total of 28.7 Cr equity shares, as of March 2023, same as in August last year.

Meanwhile, it must be noted that SoftBank has been struggling with mounting losses due to the weak market performance of its portfolio startups across the globe. However, the situation has improved slightly in the last few quarters with these startups aggressively eyeing profitability.

Zomato, Paytm, Delhivery, and PB Fintech, the four listed Indian startups in SoftBank’s India portfolio, together added over $100 Mn to SoftBank Vision Fund 1’s books in the quarter ended March 2023. 

While Paytm helped the fund gain $111 Mn in the January-March quarter, Zomato added $28 Mn to its loss in the same period.

Meanwhile, as of March 31, 2023, Zomato’s total contribution to SoftBank Vision Funds’ loss stood at $131 Mn while Paytm’s overall contribution to the loss was at $526 Mn.

Overall, SoftBank’s Vision Fund segment reported a loss of 4.3 Tn Yen ($32 Bn), up 68.7% year-on-year (YoY) in the year ending March 31, 2023.

Shares of Paytm rose in the last four sessions of this week, closing at INR 895.5 on the BSE on Friday. On the other hand, Zomato shares fell 1% today, closing at INR 74.34.

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