SoftBank Sells Another 2% Stake In Fintech Giant Paytm

SUMMARY

SoftBank has sold the stakes over the past month via open market operations

As Paytm’s share price has been over INR 830 over the last month, the Japanese investor has offloaded shares regularly during the period in small tranches

SoftBank now holds about 9.15% stake in Paytm

Japanese tech conglomerate SoftBank has sold another 2% stake in Paytm’s One97 Communications worth about $300 Mn.

SoftBank has sold the stakes over the past month via open market operations, MoneyControl reported.

As Paytm’s share price has been over INR 830 over the last month, the Japanese investor has offloaded shares regularly during the period in small tranches through open market transactions. Moreover, SoftBank has remained largely at profit during this stake sale.

“SVF India Holdings (Cayman) Ltd has disposed of an aggregate of 12,771,434 equity shares of One97 Communications Ltd in a series of disposals undertaken between May 9, 2023, and July 13, 2023, with the disposal on July 13, 2023, breaching the 2 percent threshold specified in Regulation 29 (2) of the SEBI Takeover Regulations,” the Japanese conglomerate said in a statement.

SoftBank now holds about 9.15% stake in Paytm, the statement added.

Earlier in May, SoftBank offloaded over a 2% stake in Paytm’s parent entity One97 Communications.

SVF India Holdings (Cayman) Ltd disposed of an aggregate of 1.3 Cr equity shares of Paytm in a series of disposals undertaken between February 10, 2023 and May 8, 2023.

After the completion of the sale in May, SoftBank held about 11.17% stake in the fintech major or around 7.1 Cr share.

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.

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

About 50% of Indian startups in the portfolio of Japanese investor SoftBank are close to breaking even or above it, a note by investment bank Bank of America (BofA) said in May.

The portfolio companies did a ‘good job’ in cutting costs materially in the last six-nine months at a time when startups are grappling with a funding winter amid macroeconomic headwinds.