SoftBank Offloads 2% Paytm Stake Worth $120 Mn

SoftBank said on Thursday (May 11) that it has offloaded over a 2% stake in Paytm’s parent entity One 97 Communications.

“SVF India Holdings (Cayman) Limited has disposed of an aggregate of 13,103,148 equity shares of One 97 Communications Limited in a series of disposals undertaken between February 10, 2023 to May 8, 2023,” an exchange filing by Paytm said. The offloaded amount implies a stake sale of around 2.07% of its total shareholding.

As per the BSE data, SVF India Holdings (Cayman) Ltd held 8.4 Cr shares in Paytm till February 18 this year or a 13.24% stake, which shrank to 8.2 Cr shares or a 12.88% stake at March end. 

After the completion of the sale, SoftBank will hold about 11.17% stake in the fintech major or around 7.1 Cr shares. Reports suggest that SoftBank’s share offloading deal in Paytm was worth around $120 Mn. 

In November last year, SoftBank had sold around 3 Cr shares in Paytm worth $200 Mn, soon after the company’s lock-in period for its pre-IPO investors ended.

Paytm shares fell after SoftBank stake sell report today. Shares were trading 2.8% lower at INR 706.9 on the BSE by 12.45 PM IST.

It must be noted that SoftBank’s share offloading comes at a time when Paytm has finally started achieving operational profitability and the company’s fundamentals are becoming stronger across business verticals.

Paytm’s net loss declined 78% year-on-year (YoY) to INR 167.5 Cr in Q4 FY23, while its operating revenue was up 51% at INR 2,334.5 Cr in the quarter. After achieving EBITDA profitability in the December quarter, Paytm’s EBITDA before ESOP costs, including UPI incentive received from the government, stood at INR 101 Cr in the March quarter. 

SoftBank’s Stake Offloading in Indian Startups

Besides Paytm, the Japanese investment giant has recently offloaded its stake in multiple other portfolio companies including PB Fintech and Delhivery as its overall losses from the main SoftBank Vision Fund (SVF) kept growing amid adverse market conditions.

In fact, its stake sale continues despite a slight improvement in SVF’s Indian public company portfolio. SVF 1 has reported positive gains of $100 Mn in total from Zomato, Paytm, Delhivery, and PB Fintech in the quarter ending March 2023.

While Paytm’s total contributed loss to the fund was $526 Mn till March 31, 2023, SoftBank earned $111 Mn from Paytm in the quarter ending March 2023.

Despite the improvement reported in its other major portfolio companies as well, SoftBank’s Vision Fund segment saw its losses balloon to 4.3 Tn Yen ($32 Bn) in the fiscal year of 2023.