SoftBank plans to offload $215 Mn worth of shares in fintech major Paytm

SoftBank had cumulatively invested around $2.2 billion in these three companies (Paytm, Policybazaar, and Delhivery) and offloaded shares worth $560 million at their initial public offerings (IPO). This means that it is sitting on a net gain of around $160 million from these bets. 

SoftBank is looking to sell $215 million worth of shares in Paytm as the fintech’s lock-in for pre-IPO investors ends later this week. The Japanese investor is offering to sell 29 million shares in the company at Rs 555 to Rs 601.45 apiece, at a discount of up to 7.72 percent to the current market price.

SoftBank’s investment in Paytm is in the red. It had made a total investment of $1.6 billion in the fintech major and taken out around $220-250 million in the company’s IPO last November. With the fintech’s shares trading 70 percent below its IPO price, SoftBank’s remaining stake of around 17.5 percent in the company is currently worth $900 million.

SoftBank, whose holdings in Paytm, Policybazaar, and Delhivery are currently worth $1.8 billion, will pare its stakes gradually over the next two years so as to not trigger a panic selling as the lock-in for pre-IPO investors in the three companies expires over the next 10 days.

SoftBank had cumulatively invested around $2.2 billion in these three companies (Paytm, Policybazaar, and Delhivery) and offloaded shares worth $560 million at their initial public offerings (IPO). This means that it is sitting on a net gain of around $160 million from these bets. 

The Japanese venture fund, however, is sitting on 2X gains from its investments in Delhivery and PB Fintech, the parent company of insurance aggregator Policybazaar.

SoftBank had invested around $199 million in Policybazaar, sold shares worth $250 million in its IPO last year, and its remaining stake of 10-11 percent is worth around $220 million. It had invested around $380 million in Delhivery, offloaded shares worth $75 million in its IPO, and its current holding of more than 18 percent stake in the logistics company is worth around $670 million. The Masayoshi Son-led company has invested around $11 billion in Indian start-ups through its two Vision Funds and had made bets of about $3.5 billion prior to that.

Paytm’s pre-IPO investors, which include likes of Warren Buffet’s Berkshire Hathway, SoftBank, Elevation Capital, and Alibaba. Regulatory concerns and an unclear path to profitability have hurt the fintech’s fortunes in the stock market after its Rs 18,300 crore initial public offer last year.

It recently announced Q2 FY23 financials and had posted a 76 percent y-o-y growth in revenue to Rs 1,914 crore. Meanwhile, the company’s losses reduced by 11 percent on a sequential basis. The company’s contribution profit surged 224 percent y-o-y to Rs 843 crore.

Earlier this week, the company announced that in its fast-growing lending business, it had disbursed 3.4 million loans in October, registering a y-o-y growth of 161 percent.