Japan’s SoftBank Group is likely to exit one of its biggest bets in India, Paytm, this month registering investment losses in the range of $150-200 million, sources said.
The Masayoshi Son-controlled investment firm’s stake in the Indian payments platform has come down to 1.4 per cent at the end of March 2024, as it has been rapidly divesting stake over the last couple of years. Sources said that it will likely exit the company this month, ending a 7-year association.
SoftBank did not respond to a query sent through its website.
At the time of Paytm’s IPO in 2021, SoftBank had held 18.5 per cent stake through SVF India Holdings (Cayman) Limited and SVF Panther (Cayman) Limited, which sold its stake in the IPO.
SVC India Holdings first sold its stake in November 2022, after the expiry of the lock-in period. Between September 2022 and March 2023 its stake in Paytm fell to 12.88 per cent from 17.45 per cent. Thereafter its pace of divestment has been rapid. By June 2023 it had pared its stake to 9.18 per cent, at the end of December 2023 it was at 6.46 per cent and at the beginning of 2024 it had already gone down to around 5 per cent.
SoftBank’s stake sales in the payments firm have been through a mix of block deals and open market transactions. Between January 23 and February 26 this year, it divested 2.17 per cent through open market sales to bring its stake down to 2.83 per cent.
Shares of Paytm, a pioneer in the payments space, have been languishing since a regulatory clampdown on its payments bank arm and the stock has fallen nearly 64 per cent from the 52-week high hit in October last year. It slid to a 52-week low of ₹310 last month while the shares have declined 43 per cent in 2024 so far.
SoftBank funding
SoftBank first invested in Paytm in May 2017 infusing around $1.4 billion, valuing the company at around $9 billion. It was one of the biggest investments in India then and it came at a time when the Japanese firm had incurred losses of over $1 billion on its investments in Snapdeal and Ola.
In 2019 SoftBank participated in another funding round where Paytm had raised around $1 billion from a group of investors including China’s Ant Financial Services, valuing the Indian company at $16 billion. SoftBank’s contribution was not revealed.
Paytm’s IPO had an issue price of ₹2,150, but its debut was at a steep discount and its share price has remained below ₹1,000 most of the time.