Japan’s SoftBank Group Corp has pared its stake in Indian digital payments firm Paytm by 2% in the last month, bringing its total holding in the company to 9.15%, according to a regulatory filing.
“SVF India Holdings (Cayman) Limited has disposed of an aggregate of 12,771,434 equity shares of One 97 Communications Limited in a series of disposals undertaken between May 9, 2023, and July 13, 2023, with the disposal on July 13, 2023, breaching the 2% threshold specified in Regulation 29(2} of the SEBI Takeover Regulations,” the firm said in the filing.
According to media reports, the stake sales in recent months have generated about $250-300 million for Softbank.
In May also, SoftBank had trimmed 2% of its stake in Paytm worth $120 million.
Among its other significant stake sales, SoftBank, earlier this year, raised about $115.67 million from shedding its 3.8% stake in Indian logistics startup Delhivery.
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, 2022, 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 in 2021. 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 eroded as the stock has fallen 56% from its debut price of Rs 1,950 per share. The stock was trading at Rs 847 on Tuesday afternoon.
Earlier this year, China’s Alibaba Group sold its remaining stake in Paytm for about $167.14 million through a block deal.
In May, the digital payments firm reported that its quarterly loss 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.
Paytm, in the past, has said it expects to turn profitable by September 2023.
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.