New Delhi: SoftBank, the Japanese investment conglomerate, has sold over 2 percent of its stake in One97 Communications Limited, the parent company of Paytm, to comply with the SEBI takeover regulations. Data from the stock exchange shows that a SoftBank subsidiary, SVF India Holdings (Cayman) Ltd, sold 13,103,148 shares between February 10, 2023, and May 8, 2023, representing approximately 2.07 percent of the total shareholding. Sources suggest that the deal was worth nearly $120 million. After the sale, SoftBank will hold approximately 11.17% stake in Paytm, equivalent to around 70,809,082 shares. The company declined to comment on the development.
SoftBank had invested $1.6 billion in Paytm in Q4 2017 and sold shares worth $220 million at the time of Paytm’s IPO. In November 2022, SoftBank sold about 4.5 percent of its stake in Paytm for Rs 1,631 crore via an open market transaction. The recent sale of its stake in Paytm is part of a series of divestments that SoftBank has made in the past few months. For instance, it offloaded nearly 5 percent of the equity of PB Fintech, the parent company of Policybazaar, for Rs 1,043 crore in a block deal on the NSE.
Media reports indicate that Ant Group, another stakeholder in Paytm, is also considering reducing its stake in the fintech company to comply with SEBI regulations.
Paytm, meanwhile, announced that its consolidated net loss narrowed sharply to Rs 168.4 crore in Q4 FY23, compared to a loss of Rs 761.4 crore in Q4 FY22. The company’s revenue from operations stood at Rs 2,334.5 crore in Q4 FY23, registering a growth of 51.5 percent from Rs 1,540.9 crore in Q4 FY22 and an increase of 13.2 percent from Rs 2,062.2 crore in Q3 FY23.
The sale of a stake in Paytm by SoftBank indicates the increasing scrutiny by regulators in India on the shareholding patterns of large companies. The SEBI takeover regulations mandate that any acquisition of over 25% of the shares or voting rights in a company be reported to the regulatory body, and open offers be made to other shareholders. Companies are required to comply with these regulations to ensure that there is no concentration of shareholding or undue influence by any one entity.
