SoftBank sells another 2% stake in Paytm; holding slips below 10%

Japanese investor has monetised $900 million to $1 billion on a total investment of $1.6 billion: Sources

Japanese technology conglomerate SoftBank has sold 2 per cent of its shares in One97 Communications, the parent firm of Paytm. With this, the Minato-headquartered investor’s stake in Paytm has come down to less than 10 per cent.

SoftBank, which holds a stake in the financial technology unicorn via Softbank Vision Fund India Holdings (Cayman), has disposed of an aggregate of 12,771,434 equity shares in a series of disposals undertaken between May 9 and July 13, it said in a regulatory filing.

After the latest sale, SoftBank’s stake in the company is down to 9.15 per cent. This is down from the 12.3 per cent stake at the end of March 2023. Paytm’s share price was down 2.5 per cent at ~841 per share at the close of market hours.

 

According to sources, SoftBank has sold shares worth $200 million over several weeks.

“It has monetised about $900 million to $1 billion on a total investment of $1.6 billion,” added the source. This would mean SoftBank is within reach of break-even on the investment it did in Paytm.

SoftBank declined to comment on the issue.

Since Paytm’s stock price has been improving, SoftBank has been selling its stake in the company in the open market.

SoftBank started selling its stake in the company as its mandatory lock-in period came to an end in November 2022. Paytm’s share price has surged nearly 58.4 per cent since the beginning of 2023.

In November 2022, Softbank had sold a 4.5 per cent stake in the digital payments company through block deals for $200 million, reported a Reuters report then.

According to a Macquarie report that came out in June 2023, Ant Group (formerly known as Ant Financial), which still holds roughly 25 per cent of the company, would look at bringing down its stake.

Earlier this month, Paytm reported a 167 per cent growth in the value of loan disbursements for the quarter-to-date period. It distributed loans amounting to ~14,845 crore in the first quarter (Q1) of 2023-24 (FY24), a significant rise from ~5,554 crore in Q1 of 2022-23.

The company also saw the number of loan disbursements rise in Q1FY24. It distributed 12.8 million loans in Q1FY24, from 8.5 million loans in the same period of the previous financial year (2022-23), a 51 per cent rise.

“Our focus remains on asset quality by continuously reviewing our partner’s cohort data and tightening credit policy wherever needed. This reflects in the growth of the value of loans distributed in the quarter,” the company said in an operating performance update.