“SoftBank exited Paytm at a loss of 10-12 percent, with the total loss being about $150 million,” one of the people said.
SoftBank held around 18.5% stake in Paytm before the company’s initial public offering (IPO) in 2021. The company held 17.3% through SVF India Holdings (Cayman) Ltd and 1.2% through SVF Panther (Cayman) Ltd.
SVF Panther sold its entire stake during the IPO for INR 1,689 crore (approximately US$ 225 million).
“SoftBank announced that it would exit Paytm within 24 months of the IPO. The exit was as per SoftBank’s plan. But the company was expecting losses at the time,” another source said. SoftBank acquired Paytm shares at an average price of around Rs 800 per share. Paytm’s share price was trading at Rs 1,955, down 9%, and has not yet reached the issue price of Rs 2,150 per share till date. Paytm’s share price fell further after the Reserve Bank of India (RBI) banned trading in affiliate Paytm Payments Bank Ltd (PPBL). It hit an all-time low of Rs 310 on May 9.
Paytm reported a widening of losses to Rs 5,500 crore for the fourth quarter of fiscal 2023-24 following a ban on transactions linked to payments banks.
During the reported quarter, the company wrote off its investment of Rs 2,270 crore in 39 per cent stake in PPBL following future uncertainties related to its business operations, including uncertainties over other regulatory developments.
The company’s losses narrowed to Rs 1,422.4 crore for the year ended March 31, 2024. Paytm had posted a loss of Rs 1,776.5 crore in FY23.
Billionaire Warren Buffett’s Berkshire Hathaway Inc. also exited Paytm about seven months ago, selling its shares for less than the acquisition price.
According to official documents, the company acquired 2.6% stake in Paytm for Rs 1,279.7 per share, totalling Rs 2,179 crore.
The shares were sold at an average price of Rs 877.29 per share, taking the November trading value to Rs 1,370.63.
Paytm’s share price closed at Rs 467.25 per share on Friday.
