Amid a significant decline in stock value, existing large shareholders of numerous listed new-age Indian technology businesses have been consistently sharing partial stakes. We have seen this happen when Chinese tech behemoth Alibaba was looking to sell a part of its stake in India’s food delivery aggregator Zomato – over 26 million shares – and raise $200 million in a block deal. Now, SoftBank looks to do the same.
According to various reports, the Japanese behemoth, which has been among some of the biggest backers in the Indian tech startup scene, plans to sell a 5% share in PB Fintech, the parent company of online insurance marketplace Policybazaar, via a block sale on Friday. Citi India has been chosen to be the lone broker of the deal, and there is a lock-up period of 60 days on further sale of PB Fintech’s shares once the block deal is completed.
Softbank is expected to sell 2.2 crore shares in a block sale at a base price of ₹440, which is 4.5% less than the stock’s closing price on Thursday of ₹461.55.
Softbank hopes to raise ₹1,000 crores with the deal. At the moment, it has a stake of 10% in Policybazaar, and after the block purchase on Friday, the Japanese conglomerate will continue to own 5% of the internet insurance aggregator. It has already put in around $199 million in Policybazaar, and sold shares worth $250 million in its IPO in 2021 – Policybazaar had listed on the public markets at ₹1,150 per share, closing at over 22% premium to the issue price. Since then though, it has dropped as much as 65%, following trends of other new-age tech stocks, such as Paytm, Zomato, Nykaa among others.
The development will make SoftBank the latest investor to offload shares in PB Fintech. American investment firm Tiger Global Management had earlier divested a portion of its stake in the Policybazaar parent through open market transactions. A report by The Economic Times in November suggested that Tiger sold a total of 1,34,17,607 shares in PB Fintech for ₹522 crores.