SoftBank is planning to offload 29 million of its shares in One97 Communications in a block deal, which operates digital payments and financial services provider Paytm, through a block deal. This comes as Softbank witnesses the end of the one-year mandatory lock-in implemented for all those who invested in Paytm prior to its debut in the public market. With the end of the lock-in period on November 15, 86% of the unicorn’s shares became free to trade, allowing its pre-IPO investors (such as SoftBank) to offload shares that have so far remained in private hands.
According to reports, Bank of America will be the banker to the block deal, and the shares – which represents 4.5% of SoftBank’sstake in the Indian fintech unicorn – will be offloaded to institutional investors within the price range of ₹555-601, which just falls shy of the current price of Paytm’s shares – they fell by 4% on Wednesday to close trading to ₹601.30. The Japanese conglomerate has, so far, put in a total of $1.6 billion in the fintech unicorn,
The block deal is set to commence tomorrow, following which SoftBank’s stake of 17.45% in Paytm to around 12.9% – through SVF India Holdings – will drop, although it will make the Japanese conglomerate’s $200 million (₹1,628.9 crores) richer. Its total stake in Paytm is currently worth $900 million. Paytm’s largest shareholder continues to be AntFin Holding BV, which is an entity of Alibaba’s fintech arm Ant Financial, with a stake of 24.9%.
Paytm’s shares, like several others, have been hit hard this year amidst an economic downturn and brutal selloffs, and ever since it made an entrance to the public exchanges with a stellar IPO on November 15, 2021 – it raised $₹18,300 in its initial public offering, which is the second biggest IPO till date in India – its stock price has fallen steeply (over 70%) from its issue price of ₹2150 per share. However, the fintech unicorn has clocked an improvement in its performance since then, and it clocked a year-over-year (YoY) growth in revenue of 76% in the second quarter of the financial year 2022-23 (FY23). Its revenue for the quarter rose to ₹1914 crores, while its profits rose by 224% and its businesses clocked stellar growth. Additionally, it later announced that it had disbursed a total of 3.4 million loans in October, which is a YoY growth of 161%, but remains unprofitable as its losses widened for the quarter.
