SoftBank Exits Paytm At A Loss Of $150 Mn

Paytm Zooms Over 15% After Vijay Shekhar Sharma Reiterates Focus On Consumer Payments

SUMMARY

SoftBank incurred a loss of 10-12% on its investment in Paytm

SoftBank invested nearly $1.5 Bn in Paytm’s parent, One97 Communications, in 2017 across multiple tranches

Meanwhile, the share of total foreign direct investment in the fintech company declined by 200 basis points during Q1 FY25

Japanese tech investor SoftBank reportedly exited troubled fintech major Paytm in the June quarter (Q1) of the ongoing fiscal year at a loss of $150 Mn.

Citing sources, news agency PTI reported that the investment firm incurred a loss of 10-12% on its investment in the fintech major. SoftBank reportedly invested nearly $1.5 Bn in Paytm’s parent, One97 Communications, in 2017 across multiple tranches.

“Softbank has exited Paytm at a loss of 10-12%. The total loss is around $150 Mn,” the report quoted a source as saying.

Meanwhile, another source reportedly said that the development was in line with SoftBank’s plan to exit Paytm within 24 months of the fintech’s initial public offering (IPO).

For the uninitiated, Softbank held around 18.5% stake in Paytm via two entities before the fintech major’s IPO in 2022. While SVF India Holdings (Cayman) Ltd held 17.3% shares, SVF Panther (Cayman) Ltd owned 1.2% in the Vijay Shekhar Sharma-led company.

At the time of the public listing, SVF Panther reportedly sold its entire stake for INR 1,689 Cr ($225 Mn).

Since then, the investment major has steadily brought down its shareholding in Paytm. While it owned a 12.88% stake in Paytm at the end of March 2023, the number further went down to 1.4% in March 2024.

The development comes a day after Inc42 reported that the total foreign direct investment (FDI) in the company declined by 200 basis points during the June quarter of fiscal year 2024-25 (FY25). Meanwhile, shareholding of foreign portfolio investors (FPIs) in the fintech major also came down to 20.48% in Q1 FY25 from 20.64% in the preceding quarter.

Shares of Paytm have been under pressure since February after the Reserve Bank of India (RBI) announced curbs on Paytm Payments Bank.

Following this, Paytm’s net loss widened more than 3X to INR 550.5 Cr in Q4 FY24 from INR 167.5 Cr in the year-ago quarter. Its top line also decreased 2.9% year-on-year to INR 2,267.10 Cr during the quarter.

Amid all these, shares of Paytm have declined over 25% year to date. The stock ended Friday’s trading session 2.47% lower at INR 467.25 on the BSE.