SoftBank Posts 49% Uptick In Q1 Operating Profit From Flipkart Stake Sale

SoftBank Posts 49% Uptick In Q1 Operating Profit From Flipkart Stake Sale

SUMMARY

SoftBank Group Corp posted a 49% increase in its first quarter operating profit

SoftBank gains were led by the sale of its Flipkart shares to Walmart for about $4 Bn

As part of Flipkart stake sale, SoftBank said it expects deferred tax of $645K (¥71,746 Mn)

Japanese technology conglomerate SoftBank Group Corp posted a 49% increase in first-quarter operating profit. The profit of $2.2 Bn (¥244.9 Bn) for its $100 Bn SoftBank Vision Fund came from the gains of its stake sale in Flipkart to Walmart.

For the quarter ended June 30, the Tokyo-headquartered company posted an operating profit of $6.42 Bn (¥715 Bn), compared to $4.30 Bn (¥479 Bn) in the same period in the previous year.

SoftBank said it expects the sale value of its Flipkart shares (representing 19.95% of Flipkart shares on a fully diluted basis) to be approximately $4 Bn. SoftBank also said it expects to pay a deferred tax of $645K (¥71,746 Mn) on this gain.

The Flipkart stake sale represents a milestone for the SoftBank Vision Fund because it is the first instance of  monetisation of an investment made under it.

“The Company estimates that the sale of Flipkart shares will occur within 24 months of the inception of the investment and has calculated the deferred tax at 43.68%, being the Indian short-term capital gains tax rate expected to apply to the sale of Flipkart shares,” it stated in its consolidated financial report for the first quarter ended June 30th.

SoftBank Increasing Its Bets In India

SoftBank is said to be mulling a $5 Bn Asia fund, with a major focus on India, half of which is expected to be invested in the country.

Last month, reports surfaced that Kabir Misra, managing partner at SoftBank Capital, was looking to launch his own startup fund with a corpus of $250 Mn and that the fund would also count SoftBank Group as an anchor limited partner.

In May, in the biggest M&A deal seen in Indian ecommerce segment, Walmart bought about 77% in Flipkart for $16 Bn, opening up a new front in the battle with Amazon to be the leader of what is the most lucrative ecommerce market in the world.

Soon after Flipkart deal, SoftBank’s more than $200 Mn investment in Gurugram-based online insurance startup PolicyBazaar led the startup to the Unicorn club.

As SoftBank exits Flipkart, it is also planning to invest in its portfolio company Paytm’s ecommerce unit i.e. Paytm Mall. Inc42 had reported earlier that an initial round of discussions to invest as much as $3 Bn in Paytm Mall.

SoftBank has already invested $8 Bn out of the $10 Bn in the Indian ecommerce and internet market in the last five years after setting a target to invest in India by 2024 and going by the rewards it has reaped, it will surely be looking to up its investment a notch after previously slowing down because of write-offs in some of its initial investments like Snapdeal and Housing.com.

Reports have already emerged as to how the Japanese conglomerate plans to invest between $60 Bn -100 Bn in a solar power project in India and how it will partner with Paytm to create a mobile payment service in Japan by year-end.

Expect SoftBank to go hard on the Indian markets in the times to come.

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

SoftBank Posts 49% Uptick In Q1 Operating Profit From Flipkart Stake Sale-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

SoftBank Posts 49% Uptick In Q1 Operating Profit From Flipkart Stake Sale-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

SoftBank Posts 49% Uptick In Q1 Operating Profit From Flipkart Stake Sale-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

SoftBank Posts 49% Uptick In Q1 Operating Profit From Flipkart Stake Sale-Inc42 Media
SoftBank Posts 49% Uptick In Q1 Operating Profit From Flipkart Stake Sale-Inc42 Media
You’re in Good company