Shares of Paytm Parent One97 fall on Softbank’s Stake Sale report

Shares of Paytm parent One 97 Communications fell nearly 10 percent to their lowest since May after Reuters reported that SoftBank would sell up to $215 million (about Rs. 1,755 crore) of shares in the Indian e-payments platform. . SoftBank is selling a 4.5 percent stake in Paytm giant’s Indian parent One 97 Communications worth up to $215 million in a block deal, according to a term paper reviewed by Reuters.

SoftBank’s Vision Fund is the second-largest shareholder in Paytm, whose shares have fallen more than 60 percent since it went public last year. SoftBank had a 17.5 percent stake in the digital payments and fintech company as of September 30.

The stock is trading in the range of Rs. 555 to Rs. 601.45 per share, the term paper said, the lower end of the range offering a 7.7 percent discount to the company’s last closing price. Final prices will be set later on Thursday.

The sale is the latest in a series of divestments that SoftBank has made in the past few months, after its flagship Vision Fund unit booked nearly $50 billion (roughly Rs. 4,08,150 crore) in losses in just six months.

The shares are mostly bought by hedge funds, including Millennium Capital, Segantii Capital Management, Ghisallo Capital Management, said a person with direct knowledge of the matter, and other buyers including Norges Bank, Norway’s largest bank. it’s still a secret.

SoftBank, Paytm, Millennium, Segantii, Ghisallo and Norges Bank did not respond to requests for comment.

SoftBank is selling 29 million shares in the deal led by Bank of America, according to a term paper.

The news comes a day after the investor deadline for Paytm’s November 2021 initial public offering closed. Shares of the company opened on Thursday at Rs. 546.05, 9 percent lower than the previous close.

SoftBank raised $2.4 billion (about Rs. 19,600 crore) by selling shares in T-Mobile US earlier this year.

The Vision Fund sold a range of assets in the April-June quarter – including ridehailer Uber and real estate platforms Opendoor and KE Holdings, which operates China’s Beike – for a net gain of $5.6 billion (about Rs 45,700 crore).

Paytm went public last year in India’s largest-ever initial public offering (IPO), but shares fell as much as 70 percent below the stock price in the months following the IPO.

While SoftBank has invested $1.6 billion (about Rs. 13,060 crore) in the digital payments company over the years, among its biggest investments in India, at Paytm’s current share price, 17.5% of SoftBank held in the company before the share sale on Thursday it’s worth it. Rs. only about $900 million (roughly Rs. 7,350 crore).

© Thomson Reuters 2022

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