Japanese investment company SoftBank, which has not been negotiating any funding deals in India lately and is drawing up to sell investments in bourse-bound Ola Electric and FirstCry, still retains shares of $1.1-1.2 Bn in its listed portfolio businesses.
(Image Source: Moneycontrol.com)
As per ET’s report, Softbank has sold stakes worth $1.8-1.9 Bn during the public offerings and through post-listing sales in four Indian businesses — Paytm, Zomato, PB Fintech and Delhivery — that went public in 2021 and 2022. It had spent $2.3-2.4 Bn in these four new-age enterprises.
Among the four public businesses, Paytm is proving to be a drag on SoftBank’s investments in India. SoftBank offloaded about 2% ownership in Paytm’s parent business, One97 Communications, valued at roughly $300 Mn in July. Earlier in May, SoftBank emptied over a 2% share in the company.
In December, SoftBank offloaded 2.53% of its share in Gurugram-based parent Policy bazaar PB Fintech through successive block sales, amounting to a combined INR 913.7 Cr ($109 Mn).
Following the transaction involving 1.14 Cr shares, SoftBank now holds 83.23 Lakh shares in PB Fintech. On December 8, SoftBank offloaded 9.35 Cr ($1.1Mn) shares of food tech behemoth Zomato in an INR 1,127 Cr block sale.
On November 17, roughly 1.8 Cr shares, constituting 2.51% of the equity in Gurugram-based logistics firm Delhivery, were exchanged in a deal valued at INR 747 Cr ($89.6 Mn), with each share priced at INR 403.51.
SoftBank’s plan to minimize its holdings through secondary sales while avoiding new investments aligns with most growth and late-stage investors who have cut down on investments over the last 15-18 months.
Having sponsored roughly a fifth of India’s 100+ unicorns (startups with valuations over $1 Bn), SoftBank has invested $15 Bn in the country. The SoftBank Vision Fund accounted for $11 Bn of total investment, with the remaining $4 Bn committed to industries including renewable energy and infrastructure.
SoftBank is the largest institutional shareholder of Ola Electric and FirstCry. Both the firms submitted draft paperwork for their first public offerings last month.
As per ET, whereas Ola Electric is looking for a $7-8 Bn valuation in its public offering, FirstCry is projected to be roughly $4 Bn. At current values, SoftBank is projected to sell interests worth around $180 Mn in FirstCry and $45-50 Mn in Ola Electric.
In Ola Electric, SoftBank would be selling 23.8 Mn shares, or a 0.65% interest, while in FirstCry, it plans to dump 20.3 Mn shares, or a ~4.5% stake, as per their draft IPO documents. After the IPO, it will still have shares worth an estimated $840-850 Mn in FirstCry and $1.4-1.6 Bn in Ola Electric at IPO prices.
SoftBank’s substantial profit of $1.8-1.9 billion through selling shares in four leading Indian startups reflects their strategic investment and the thriving progress of these enterprises. This action demonstrates SoftBank’s skill in spotting lucrative markets and emphasizes the maturation and strength of India’s startup ecosystem. It represents a calculated financial strategy by SoftBank, highlighting the significance and opportunities within India’s tech scene.
(Information Source: Inc42)
