Japan-based Softbank has begun the process of selling a 4.5 percent share in One97 Communications for roughly Rs 1,627 crore ($200 million) in a block sale.
Japan-based Softbank has begun the process of selling a 4.5 percent share in One97 Communications for roughly Rs 1,627 crore ($200 million) in a block sale, according to sources resulting in a decline in the Indian company’s shares. Two sources with knowledge of the matter said that Softbank has made an offer to sell the shares it owns via its subsidiary SVF India Holdings with share prices in between 555 to 601.55 rupees per share, at a discount to the current market pricing of up to 7.72 percent.
According to Reuters calculations, SoftBank will receive $200 million in total amount paid for selling 29.35 million shares at that price. After the investors’ lock-in period for Paytm’s November 2021 Initial Public Offering (IPO) concluded, the announcement of the trade caused the company’s shares to drop by more than 9%.
SoftBank’s Vision Fund is the 2nd largest shareholder in Paytm. It invested a total of $1.6 billion in the fintech behemoth and took out between $220-250 million in the company’s IPO last November. SoftBank’s remaining ownership in the fintech is reportedly around 17.5 % worth $900 million, with its shares selling 70% below their IPO price.
The transaction is the most recent in a series of asset sales made by SoftBank in recent months after its flagship Vision Fund unit suffered losses of roughly $50 billion in only six months.
The transaction is the most recent in a series of asset sales made by SoftBank in recent months after its flagship Vision Fund unit suffered losses of roughly $50 billion in only six months. According to one of the sources with direct knowledge of the situation, hedge funds, including Norges Bank, Segantii Capital Management, Millennium Capital, and Ghisallo Capital Management, are among the other buyers of the shares in addition to other investors.
Because they were not authorised to discuss the subject in public, the sources asked to remain unnamed. On the other hand, requests for a response from Norges Bank, Paytm, Ghisallo, Millennium, Segantii and SoftBank were not answered. The term sheet said that Bank of America led the transaction.
The sale comes after the one-year mandatory lock-in period for Paytm pre-IPO investors expired.
The sale comes after the one-year mandatory lock-in period for Paytm pre-IPO investors expired. Paytm began trading on the bourses on November 15, 2021, after generating 18,300 crore in an initial share offering, the second largest IPO in India to date. Paytm’s journey as a publicly traded corporation, however, rapidly ended in tears, as the stock dropped 27% on market launch from its issue price of $2,150 per share.
It may be mentioned that the real estate platforms Opendoor Technologies, Uber Technologies, and KE Holdings, which runs China’s Beike, were among the assets sold by Vision Fund in the April-June quarter, making a gain of $5.6 billion.
In India’s largest-ever IPO last year, Paytm went public, but in the months that followed, the share price of the company plunged as much as 70%. Despite having made one of its largest investments in India, Paytm, worth $1.6 billion over the years, SoftBank’s 17.5% stake in the business prior to Thursday’s share sale is only worth about $900 million at the current share price. Paytm shares have remained below its IPO issue price, closing at 601.30 on Wednesday, despite the global tech decline that began last year. The stock is currently trading at a 72% discount to its IPO price.
The Japanese venture SoftBank raised $250 million from the sale of its shares in Policybazaar when it went public last year.
Besides, The Japanese venture SoftBank raised $250 million from the sale of its shares in Policybazaar when it went public last year, which left it with a stake in the company worth around $220 million. It had initially invested about $199 million in the company.
It had also made an investment of roughly $380 million in Delhivery, sold shares in the logistics company valued at $75 million during its first public offering, and now owns more than 18 percent of the business, a stake with a market value of almost $670 million. Through its two Vision Funds, the business has invested around $11 billion in Indian start-ups, with past investments totaling approximately $3.5 billion.
Edited by Prakriti Arora