SoftBank sold an additional 2 per cent of its stake in One97 Communications, the parent company of Paytm, for an estimated amount of $180 million to $200 million. This transaction has reduced the Japanese investment major’s total ownership in the fintech company to 9.15 per cent, marking the first time it has gone below the 10 per cent threshold.
“SVF India Holdings (Cayman) Limited has disposed of an aggregate of 12,771,434 equity shares of One97 Communications Limited in a series of disposals undertaken between May 9, 2023, and July 13, 2023, with the disposal on July 13, 2023, breaching the 2 per cent threshold specified in Regulation 29(2} of the SEBI Takeover Regulations,” the company said in a regulatory filing said.
As per a report by MoneyControl, SoftBank had undertaken a series of open market operations, starting in February, through which it sold 2.07 per cent of its stake in Paytm. Prior to this, Softbank held an 11 per cent stake in the Paytm. As per previous reports, SoftBank is planning to completely divest from Paytm by gradually selling off its remaining stake.
The stake sold in May was the first time that the Japanese investor managed to sell shares of Paytm at a profit since the fintech company got listed in November 2021, the report said.
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Earlier this month, Paytm announced a 167 per cent growth in the value of loan disbursements during the quarter-to-date period. In the first quarter of FY24, the company distributed loans amounting to Rs. 14,845 crores, which marked an increase from Rs. 5,554 crores disbursed in the same quarter of FY23.
Moreover, Paytm experienced a significant rise in the number of loan disbursements in the first quarter of FY24. It distributed 12.8 million loans during this period, compared to 8.5 million loans in the corresponding period of the previous financial year, representing a 51 per cent rise.
SoftBank is a prominent investor in Indian start-ups and over the years it has supported over 20 unicorns. Over the past six years, SoftBank had been an active and prolific technology investor in India, contributing nearly $12 billion across 42 deals. However, its recent cautious approach indicates a notable shift in investment strategy. Amid the global economic downturn, the investment firm has adopted a cautious and selective approach in 2023. This shift aligns with the behaviour of many late-stage investors who have also refrained from making new investments in India, despite it being the world’s third-largest startup ecosystem, over the past year.
The Japanese investment conglomerate has reduced its investments worldwide. In the fiscal year 2022-23, SoftBank’s global investments amounted to only $3.2 billion, a significant decrease from the $44.3 billion invested in the previous fiscal year 2021-22, as per data shared during the company’s recent earnings presentation.
In India, SoftBank’s investment activity also experienced a decline. In 2022, SoftBank was involved in only six deals, compared to 17 deals in the previous year 2021, as reported by Moneycontrol.