SoftBank offloads another 2% stake in Paytm, reduces shareholding to 9.15%

SVF India Holdings (Cayman) Limited, a SoftBank arm, has divested another 2% stake in Paytm's parent One97 Communications through an open market transaction in order to comply with SEBI regulation.  

As per a stock exchange filing, SoftBank has “disposed of an aggregate of 12,771,434 equity shares (approximately 2.01%) of One97 Communications Limited in a series of disposals undertaken between May 9, 2023 with the disposal on July 13, 2023 breaching the 2% threshold specified in Regulation 29(2} of SEBI Takeover Regulations”.

Post the sale, the Japanese investor’s stake in the fintech startup has come down to 9.15%, with 58,037,648 shares. 

An early investor of fintech unicorn, Masayoshi Son-led SoftBank has been offloading its shares in the listed fintech in small tranches. 

Last November, it offloaded a 4.5% stake in Paytm for Rs 1,631 crore (over $205 million), followed by another 2.07% stake for $120 million between February and May 2023. It held 17.45% before selling the part of the same at Rs 555–Rs 601 range, during that time. 

As per the shareholding pattern available on the Bombay Stock Exchange (BSE) as of March 2023—Antfin (Netherlands) Holding (holds 24.94% share); SVF India Holdings (Cayman) Limited (12.88%, now reduced to 9.15% post two sales); SAIF III Mauritius Company Limited (10.85%); SAIF Partners India IV Limited (4.60%); and BH International Holdings (2.47%) are foreign investors Paytm, while Vijay Shekhar Sharma holds 9.13%.

SoftBank Vision Fund I had invested $1.4 billion in Paytm, starting in 2017, and had managed to cash out $220 million to $250 million during the company’s IPO last year. In May 2022, SoftBank Group Corp said that Paytm’s poor performance in the public markets had caused a loss of $600 million to its Vision Fund I portfolio for the fiscal ended March 31, 2022.

For the quarter ended June 30, 2022, SoftBank had marked down its investment in Paytm by $400 million as the shares of the listed fintech lost nearly 72% over the year, compared to its issue price of Rs 2,150.

However, Paytm shares have been seeing a turnaround as the company managed to improve its revenue and contribution margin besides deepening product offerings, including loans, to attract customers. The stock price hit a 52-week high in June 2023, With this stock having risen 93% from its 52-week low of 439.60 hit in November last year.

For the financial year that ended in March 2023, Paytm posted 61% YoY revenue growth while narrowing losses by 25%, from Rs 2,396 crore in FY22 to Rs 1,776 crore in FY23. It also capped its expense growth to 18% and reached its target for operational profitability.

At the time of writing, Paytm was trading at Rs 851.6, with its share price down by 1.28% from its previous close of Rs 862. 

(The copy was updated to fix a typo)