SoftBank offloads over 2% stake in One97 Communications, the parent company of Paytm. According to an exchange filing by Paytm, SVF India Holdings (Cayman) Limited, a subsidiary of SoftBank, disposed of a total of 13,103,148 equity shares of One97 Communications between February 10 and May 8, 2023. This stake sale represents approximately 2.07% of SoftBank’s total shareholding.
Earlier this year, as per BSE data, SVF India Holdings (Cayman) Ltd held 8.4 crore shares in Paytm, equivalent to a 13.24% stake. However, by the end of March, this had decreased to 8.2 crore shares, or a 12.88% stake.
Following the completion of the sale, SoftBank will retain an approximately 11.17% stake in Paytm, equivalent to around 7.1 crore shares. Reports suggest that the value of SoftBank’s share offloading deal in Paytm is estimated to be around $120 million.
The news of SoftBank’s stake sale had an immediate impact on Paytm’s share prices, which fell by 2.8% to INR 706.9 on the BSE by 12:45 PM IST.
It is important to note that SoftBank’s decision to sell shares comes at a time when Paytm has been making progress towards operational profitability, with stronger fundamentals across its business verticals. In Q4 FY23, Paytm reported a significant decline in net loss, down 78% YoY to INR 167.5 crore. Additionally, operating revenue increased by 51% to INR 2,334.5 crore in the same quarter. Paytm achieved EBITDA profitability in the previous quarter, and its EBITDA before ESOP costs, including UPI incentives received from the government, stood at INR 101 crore in the March quarter.
Despite SoftBank’s stake reduction, Paytm’s improving financial performance indicates positive growth prospects for the company. Investors will closely monitor the impact of this stake sale on Paytm’s future trajectory and strategic partnerships.
