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SoftBank Group Likely to Exit Indian Payments Firm Paytm


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According to sources, Japan’s SoftBank Group is expected to exit its investment in Paytm, one of its major bets in India, this month. This move is likely to result in investment losses for SoftBank in the range of $150-200 million. SoftBank’s stake in Paytm has decreased to 1.4% as of March 2024, as it has been steadily divesting its stake over the past couple of years. This exit will mark the end of a 7-year association between SoftBank and Paytm. SoftBank did not respond to a query regarding this matter.

During Paytm’s IPO in 2021, SoftBank held an 18.5% stake through SVF India Holdings (Cayman) Limited and SVF Panther (Cayman) Limited, both of which sold their stake in the IPO. SVC India Holdings began selling its stake in November 2022 after the lock-in period expired. By June 2023, SoftBank had reduced its stake to 9.18%, and by the beginning of 2024, it had further decreased to around 5%.

SoftBank has divested its stake in Paytm through a combination of block deals and open market transactions. Between January 23 and February 26, 2024, it sold 2.17% of its stake through open market sales, bringing its stake down to 2.83%.

Paytm’s shares have been performing poorly since a regulatory crackdown on its payments bank arm. The stock has fallen nearly 64% from its 52-week high in October of the previous year. It reached a 52-week low of ₹310 last month, and so far in 2024, the shares have declined by 43%.

SoftBank initially invested in Paytm in May 2017, injecting around $1.4 billion and valuing the company at approximately $9 billion. This investment was significant at the time, considering SoftBank’s previous losses of over $1 billion on investments in Snapdeal and Ola. In 2019, SoftBank participated in another funding round where Paytm raised around $1 billion, valuing the company at $16 billion. The exact amount of SoftBank’s contribution in this round was not disclosed.

During Paytm’s IPO, the issue price was set at ₹2,150, but the debut price was significantly lower, and the share price has mostly remained below ₹1,000 since then.

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