SoftBank registers loss in valuation for Paytm, gains on PolicyBazaar

SoftBank Vision 1's portfolio was eroded by $23.9 billion in the fiscal ended March 31, 2022, with a $600 million loss caused by the erosion of Paytm's valuation

Paytm’s stocks have taken a beating since it listed on the Indian public markets in November 2021. At the time of IPO (initial public offering), Paytm had a market capitalisation of nearly Rs 140,000 crore, which has since been reduced to Rs 33,529 crore. 

Another SVF I portfolio company from India, insurance marketplace PolicyBazaar, which went public during the financial year alongside Paytm, saw a cumulative gain of $300 million during the fiscal according to the earnings report filed by SoftBank. 

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The overall loss of unrealised valuation for SVF I during the financial year was also caused by global companies such as ride-hailing apps Didi, Uber, and food delivery major Grab. 

The earnings report also indicated that SoftBank valued its shares in Ola Electric Mobility at $556 million and InMobi at $597 million during the transfer of the company's shares to its SoftBank Vision Fund II (SVF II) during the financial year. This is based on “fair value available at the time of the transfer if the transfer is made by a sale,” said the report. 

Loss of unrealised valuation in SVF II portfolio companies stood at $2.2 billion during the financial year ended March 31, 2022. 

"SVF II is fairly new in the market. We have reduced the valuation of some of the companies in SVF II by comparing them to the value erosion of their listed peers. These portfolio companies raised capital 18-12 months back but haven't seen an up-round since," said Masayoshi Son, Chairman and CEO of the SoftBank Group, during the earnings presentation.

He further added that the value erosion in SVF I portfolio companies, Paytm included, has been due to change in public market sentiments.

The shrinking value of SoftBank's investment portfolio is reflective of the rout in the global markets. Recently, The Financial Times reported that New York-based hedge fund Tiger Global saw nearly two-thirds of its gain on assets since its launch in 2001 being wiped off.