SoftBank holds an 11.17 percent stake in Paytm and 3.4 percent in Zomato. However, following the news of the potential stake sale, shares of One97 Communications declined by 1.5 percent, trading at Rs 878.50 apiece on the BSE. Zomato’s stock initially opened 0.8 percent higher on June 16 but later leveled off.
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SoftBank, the Japanese investment conglomerate, is reportedly looking to cash in on the surging stocks of Paytm’s parent company, One97 Communications, and food aggregator Zomato by selling small stakes in the open market. This marks a significant shift for SoftBank, as it is expected to book profits for the first time since the listing of Paytm and Zomato in 2021. Previous instances had resulted in losses for the investment bank.
SoftBank had acquired its shares in Zomato at around Rs 65-70 each and in Paytm at Rs 830-840 per share. As of June 15, Paytm closed at Rs 900, reflecting a nearly 70 percent surge this year. Similarly, Zomato closed at Rs 74.95, experiencing a 24 percent gain. Both companies have witnessed improved financial performance, contributing to their stock appreciation.
SoftBank holds an 11.17 percent stake in Paytm and 3.4 percent in Zomato. However, following the news of the potential stake sale, shares of One97 Communications declined by 1.5 percent, trading at Rs 878.50 apiece on the BSE. Zomato’s stock initially opened 0.8 percent higher on June 16 but later leveled off.
SoftBank, known for its active investments in Indian startups, has not participated in any funding rounds in 2023 due to a cautious and selective approach. Nonetheless, it seeks to partially exit some of its high-performing companies. Recently, SoftBank sold approximately 2 percent of its stake in Paytm for $120 million and also divested a portion of its Lenskart stake to ChrysCapital, generating over $70 million.
The current move by SoftBank to monetize its stakes comes in the wake of the company’s record annual loss of $7.2 billion for the fiscal year ending March 2023. Its Vision Fund investment unit reported a staggering loss of $32 billion. In response to the economic downturn, SoftBank aims to navigate through challenging times by realizing profits and reducing investments globally.
Despite its cautious approach, SoftBank has been a prominent technology investor in India, injecting nearly $12 billion across 42 deals in the past six years. However, in 2022-23, the investment amount decreased significantly to $3.2 billion globally, compared to $44.3 billion in the previous year.
As of now, Paytm was trading at Rs 887.55 on the National Stock Exchange, while Zomato was slightly lower at Rs 75.05, reflecting the fluctuations in their stock prices.
