Japan’s SoftBank Group Corp has trimmed 2% of its stake in Paytm worth $120 million, sending shares of the Indian digital payments firm down nearly 3% on Thursday.
“SVF India Holdings (Cayman) Ltd disposed of an aggregate of 13,103,148 equity shares of One 97 Communications Limited in a series of disposals undertaken between February 10, 2023, to May 8, 2023, with the disposal on May 8, 2023, breaching the 2% threshold specified in Regulation 29(2) of the SEBI Takeover Regulations,” the company said in the filing.
SoftBank reportedly owned about 13% of Paytm before the latest stake sale.
SoftBank had invested $1.6 billion in Paytm and had partially sold a stake worth $220-250 million in the IPO in 2021. As of September 30, SoftBank held a 17.45% stake in the fintech firm through SVF India Holdings (Cayman).
Paytm, also backed by China’s Ant Group, had raised $2.5 billion in its initial public offerings — one of India’s biggest last year. However, the company made a dismal debut following concerns over its high valuation and an uncertain path to profitability.
The value of both SoftBank and Alibaba’s holdings in Paytm has incurred losses as the stock has fallen 63% from its debut price of Rs 1,950 per share. The stock was trading at Rs 708 in afternoon trading on Thursday.
Earlier this year, China’s Alibaba Group sold its remaining stake in Paytm for about $167.14 million through a block deal.
Last week, the digital payments firm reported a quarterly loss that narrowed by 77% year-on-year, helped in part by a jump in loan growth, amid pressure to turn profitable ever since its dismal listing in 2021.
In the highly competitive UPI space in India, PhonePe, with over 400 million registered users, has outranked Google Pay and Paytm with a more than 45% market share of the transactions. PhonePe’s current valuation of $12 billion also puts it ahead of digital payments unicorn Razorpay, which was last valued at around $7.5 billion.
Paytm, in the past, has said it expects to turn profitable by Sept 2023.