SoftBank offloads 2% stake worth $120 million in Paytm to meet SEBI rules

This was done in a series of open market transactions since Feb 2023 to comply with Sebi's takeover regulations

Japanese technology investor SoftBank on Thursday informed the stock exchanges that it has sold 2.07 per per cent stake in One97 Communications Limited - the parent entity of fintech firm Paytm. This was done in a series of open market transactions since February 2023 to comply with the market regulator Securities and Exchange Board of India’s (Sebi) takeover regulations.

"SVF India Holdings (Cayman) has disposed of an aggregate of 13,103,148 equity shares of One 97 Communications Limited in a series of disposals undertaken between February 10, 2023 to May 8, 2023, with the disposal on May 8, 2023 breaching the 2 per cent threshold specified in Regulation 29(2) of the Sebi Takeover Regulations," SoftBank said in a regulatory filing to the stock exchanges.

SVF India Holdings (Cayman) Ltd, a SoftBank entity, has sold 13,103,148 shares between February 10, 2023, and May 8, 2023. This represents about 2.07 per cent of the total shareholding.

As a result of the stake sale, SoftBank's 13.24 per cent stake in Paytm has now reduced to 11.17 per cent. This is around 70,809,082 shares.

The market value of the transaction was not declared in the regulatory filing. But according to the media reports, this could be worth around $120 million.

This comes at a time when SoftBank on Thursday reported a net loss of 970 billion yen ($7.18 billion) for the year ended March 31, compared with a 1.7 trillion yen ($13 billion) loss in the same period a year earlier.

The latest results came from huge losses on its investments, called the SoftBank Vision Fund, amid a huge dip in technology shares.

In November 2022,  SoftBank sold around 4.5 per cent stake in Paytm for Rs 1,631 crore through an open market transaction. The Japanese conglomerate had invested $1.6 billion in Paytm in 2017. It offloaded shares worth $220 million at the time of its initial public offering (IPO).

In February this year, China’s Alibaba Group also sold 3.3 per cent stake in Paytm through the open market for a total of Rs 1,378 crore. Alibaba affiliate Ant Group was also reportedly in talks for selling shares in the company through a secondary block deal.

Paytm recently announced its Q4FY23 results. Its consolidated net loss narrowed to Rs 168.4 crore in the fourth quarter of FY23, compared to a loss of Rs 761.4 crore in the same period last year.

Paytm's revenue from operations was Rs 2,334.5 crore in Q4FY23. It registered a growth of 51.5 per cent from Rs 1,540.9 crore in Q4FY22.