Softbank sells 2% stake in Paytm’s parent- one97 communications

SoftBank has offloaded an additional 2% stake in One97 Communications, the parent company of Paytm, reducing its stake to approximately 5.06%.


The Japanese investor, previously holding close to 7% last year, executed open market operations for the sale, generating roughly $114 million (Rs 950 crore).


The divestments occurred in multiple phases between December 19, 2023, and January 20, 2024, surpassing the 2% threshold outlined in Sebi Takeover regulations.


SoftBank’s official statement revealed, “SVF India Holdings (Cayman) Limited has disposed of an aggregate of 12,706,807 equity shares of One97 Communications Ltd.”


In the past month, they witnessed a 20% surge in Paytm’s shares, influencing SoftBank’s recent divestment strategy.


Concurrently, domestic retail investors increased their stake in Paytm to 12.85% sequentially in Q3 ending December 2023, indicating a bullish sentiment. The portion held by domestic institutions also rose from 4.06% to 6.06%.


The optimistic sentiment can be attributed to Paytm’s improving operational performance. In Q3FY24, the fintech reported a 38% increase in consolidated revenue, reaching Rs 2,850 crore, and reduced losses to Rs 222 crore.


SoftBank has consistently diluted its holdings in Indian startups through public market transactions.


In addition to the ongoing Paytm stake sale, SoftBank’s venture capital fund, SVF Growth (Singapore) Pte Ltd, exited Zomato, generating approximately Rs 1,125 crore. 


The investor also concluded its exit from PB Fintech, realizing a 3X return of about Rs 914 crore.


Sumer Juneja, Head of India and EMEA at SoftBank Investment Advisers, expressed the investor’s willingness to reinvest in Indian startups.


In an interview, Juneja highlighted the significance of exits for maintaining excitement about future investments, emphasizing a disciplined approach to entering and exiting the market.