SoftBank Made $1.8-1.9 Bn By Offloading Shares In Four Listed Indian Startups

Japanese investment major SoftBank, which has not been striking any funding deals in India lately and is drawing up to offload stakes in bourse-bound Ola Electric and FirstCry, still holds shares of $1.1-1.2 Bn in its listed portfolio companies here.

As per ET’s report, Softbank has sold stakes worth $1.8-1.9 Bn during the public offerings and through post-listing sales in four Indian startups — Paytm, Zomato, PB Fintech and Delhivery — that went public in 2021 and 2022. It had invested a total of $2.3-2.4 Bn in these four new-age companies.

Among the four listed companies, Paytm is proving to be a drag on SoftBank’s investments in India. In July, SoftBank offloaded over 2% stake in Paytm’s parent entity One97 Communications worth about $300 Mn. Earlier in May, SoftBank offloaded over a 2% stake in the company.

In December, SoftBank offloaded 2.53% of its stake in Gurugram-based parent of Policybazaar PB Fintech, through multiple block deals, amounting to a cumulative INR 913.7 Cr ($109 Mn).

Following the transaction involving 1.14 Cr shares, SoftBank now holds 83.23 Lakh shares in PB Fintech.

On December 8, SoftBank offloaded 9.35 Cr ($1.1Mn) shares of foodtech giant Zomato in an INR 1,127 Cr block deal. 

On November 17, approximately 1.8 Cr shares, constituting 2.51% of equity in Gurugram-based logistics firm Delhivery, were exchanged in a deal valued at INR 747 Cr ($89.6 Mn), with each share priced at INR 403.51.

SoftBank’s approach to reduce its holdings through secondary sales, while staying away from new investments is in line with most growth and late-stage investors who have slowed down on investments over the last 15-18 months. 

Having funded nearly a fifth of India’s 100+ unicorns (startups with valuations exceeding $1 Bn), SoftBank has invested a total of $15 Bn in the country. The SoftBank Vision Fund accounts for $11 Bn of this investment, with the remaining $4 Bn allocated to sectors like renewable energy and infrastructure.

SoftBank is the largest institutional shareholder of Ola Electric and FirstCry. Both the companies have filed draft papers for their initial public offerings last month.

As per ET, while Ola Electric is looking for a $7-8 Bn valuation in its public offering, FirstCry is estimated to be valued at around $4 Bn. At these valuations, SoftBank is expected to sell stakes worth approximately $180 Mn in FirstCry and $45-50 Mn in Ola Electric.

In Ola Electric, SoftBank will be selling 23.8 Mn shares, representing a 0.65% stake, while in FirstCry, it is planning to offload 20.3 Mn shares, or a ~4.5% stake, as per their draft IPO documents. After the IPO, it would still hold stakes worth an estimated $840-850 Mn in FirstCry and $1.4-1.6 Bn in Ola Electric, at IPO valuations.

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