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  5. Paytm shares rise over 1% after Softbank exits fintech firm at $150 million loss

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Paytm shares rise over 1% after Softbank exits fintech firm at $150 million loss

Upstox
By Upstox News Desk

2 min read | Updated on July 15, 2024, 11:52 IST

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SUMMARY

Softbank had invested about $1.5 billion in One 97 Communications in tranches in 2017. A source privy to the latest development said the tech investor has exited the company at a loss of 10%-12%.

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PAYTM
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Softbank had invested about $1.5 billion in One97 Communications in tranches in 2017.

Shares of Paytm were trading in the positive territory on Monday, July 15, after the Japanese tech investor SoftBank fully exited the financial technology company.

The stock was trading 1.1% higher at ₹471.2 on the NSE at 11:33 am. Intraday, the scrip hit a higher of 473.9, reflecting an increase of 1.7%.

The increase in the share price of Paytm operator One97 Communications comes after Softbank investment arm Softbank Vision Fund divested its entire stake in the April-June quarter at a loss of around $150 million, news agency PTI reported quoting sources.

Softbank had invested about $1.5 billion in One 97 Communications in tranches in 2017.

"Softbank has exited Paytm at a loss of 10%-12%. The total loss is around $150 million," sources privy to the development told PTI.

Before Patym's IPO, Softbank held an approximately 18.5% stake in the company. It held a 17.3% stake via SVF India Holdings (Cayman) Limited and 1.2% through SVF Panther (Cayman) Ltd.

SVF Panther sold its entire stake during the public offer for ₹1,689 crore, about $225 million.

"Softbank announced that it will exit Paytm in 24 months from the time of the IPO. The exit was in line with Softbank's plan. However, the company did anticipate loss at that time," another source told the news agency.

Softbank had acquired Paytm shares at an average price of about ₹800 apiece.

Paytm shares debuted at ₹1,955, down 9%, and have yet to match their issue price of ₹2,150 per unit.

The stock plummeted further after the banking regulator, Reserve Bank of India (RBI), banned its associate company, Paytm Payments Bank Limited (PPBL), from conducting transactions. On May 9, it recorded an all-time low of ₹310.

In Q4 FY24, Paytm's losses widened to ₹550 crore following the ban on transactions related to its payments bank.

Billionaire Warren Buffet's Berkshire Hathaway Inc also divested its stake in Paytm around seven months ago by selling shares at a lower-than-acquired price.

According to an official document, the company had acquired a 2.6% stake in Paytm for ₹1,279.7 per equity share, for an aggregate value of ₹2,179 crore.

The shares were disposed of at an average price of ₹877.29 a unit, taking the transaction value to ₹1,370.63 crore in November.

With PTI inputs

About The Author

Upstox
Upstox News Desk is a team of journalists who passionately cover stock markets, economy, commodities, latest business trends, and personal finance.

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