SYDNEY/MUMBAI: SoftBank Group Corp on Thursday sold a 4.5% stake in Indian digital payments giant Paytm through block deals for $200 million, sources told Reuters, leading to a sharp fall in the shares of the Indian company.
The deal was executed at 555.67 rupees, two people with direct knowledge of the matter said, the lower end of the planned price range of 555 rupees to 601.45 rupees that was listed in the transaction’s term sheet reviewed by Reuters.
SoftBank’s sale of 29.35 million shares at that price amounts to a total consideration of $200 million, according to Reuters calculations.
Paytm shares fell more than 9% on news of the trade, which comes a day after the lock-in period for investors in Paytm’s November 2021 initial public offering (IPO closed. SoftBank’s Vision Fund is the second-largest shareholder of Paytm, whose shares have tumbled more than 60% since it went public a year ago. SoftBank had a 17.5% stake in Paytm as of Sept. 30.
The sale is the latest in a string of divestmentsthat SoftBank has made in the past few months, after its flagship Vision Fund unit booked nearly $50 billion in losses in just six months.
The shares are being bought largely by hedge funds, including Millennium Capital, Segantii Capital Management, Ghisallo Capital Management, with other buyers including Norges Bank, Norway’s central bank, said one of the people with direct knowledge of the matter.
The sources declined to be identified because they were not authorised to discuss the matter publicly. SoftBank, Paytm, Millennium, Segantii, Ghisallo and Norges Bank did not respond to requests for comment.
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The transaction was led by Bank of America, according to the term sheet.
Vision Fund sold a range of assets in the April-June quarter - including ridehailer Uber Technologies and property platforms Opendoor Technologies and KE Holdings, which operates China’s Beike - for a realised gain of $5.6 billion.
Paytm went public last year in India’s biggest-ever IPO, but the shares skidded as low as 70% below listing price in the months after the listing.
While SoftBank has invested $1.6 billion into the digital payments firm over the years, among its biggest investments in India, at Paytm’s current share price, the 17.5% stake SoftBank held in the company before Thursday’s share sale is worth only about $900 million.
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