SoftBank has divested an additional 2% stake in One97 Communications, the parent company of Paytm, reducing its stake to approximately 5.06%. The Japanese investor, once holding close to 7% last year, undertook open market operations for the sale, yielding close to Rs 950 crore. The disposals occurred in multiple tranches between December 19, 2023, and January 20, 2024, breaching the 2% threshold specified in Sebi Takeover regulations.
In a statement, SoftBank noted, “SVF India Holdings (Cayman) Limited has disposed of an aggregate of 12,706,807 equity shares of One97 Communications Ltd.”
Paytm’s shares surged 20% in the past month, influencing SoftBank’s recent divestment strategy. Meanwhile, domestic retail investors increased their stake in Paytm to 12.85% sequentially in Q3 ending December 2023, reflecting a bullish sentiment. The portion of domestic institutions also rose to 6.06% from 4.06%.
The positive sentiment is attributed to Paytm’s improving operating performance. For Q3FY24, the fintech reported a 38% rise in consolidated revenue at Rs 2,850 crore, accompanied by a reduction in losses to Rs 222 crore.
SoftBank has been steadily diluting its holdings in Indian startups through public market deals. Apart from the ongoing Paytm stake sale, SoftBank’s venture capital fund, SVF Growth (Singapore) Pte Ltd, exited Zomato, yielding about Rs 1,125 crore. The investor also completed its exit from PB Fintech, realizing a 3X return of about Rs 914 crore.
Sumer Juneja, Head of India and EMEA at SoftBank Investment Advisers, expressed the investor’s readiness to reinvest in Indian startups. In an interview, Juneja stated, “There is performance of companies, and then there is a factor of how robust the market is. So, whenever there’s an opportunity, we will sell.”
He emphasized the importance of exits for any investor to remain excited about future investments, mentioning the disciplined approach both entering and exiting the market.
