According to the sources, the term sheet claims that SoftBank Group Corp is selling a 4.5% share in One 97 Communications Ltd, the parent company of Indian e-payments giant Paytm, for up to $215 million in a block sale.
Aiming to Sell Shares
The second-largest shareholder of Paytm, whose shares have fallen more than 60% since it went public a year ago, is SoftBank’s Vision Fund. As of September 30, SoftBank has a 17.5% stake in the fintech and digital payments business.
According to the term sheet, the price range for the stock is 555 rupees to 601.45 rupees per share, with the lower end of the range giving a 7.7% discount to the company’s most recent closing price. Later on, Thursday, the final pricing will be determined.
The transaction is the most recent in a series of divestitures SoftBank has made recently, following losses of roughly $50 billion in only six months at its flagship Vision Fund arm.
According to a person with firsthand knowledge of the situation, hedge funds such as Norges Bank, Norway’s central bank, and Millennium Capital are among those purchasing the majority of the shares, along with Segantii Capital Management and Ghisallo Capital Management. The request for anonymity was made because the information was still secret.
SoftBank and Paytm
Requests for comment from SoftBank, Paytm, Millennium, Segantii, Ghisallo, and Norges Bank went unanswered. According to the term sheet, Bank of America is leading the sale of 29 million shares by SoftBank.
After the lock-in period for investors in Paytm’s November 2021 initial public offering closed, the news was released the following day. The company’s shares started trading on Thursday at 546.05 rupees, down 9% from the previous close. SoftBank raised $2.4 billion earlier this year by selling shares in T-Mobile US.
For a realized gain of $5.6 billion, Vision Fund sold a number of businesses in the April-June quarter, including the ride-hailing company Uber Technologies, the real estate platforms Opendoor Technologies, and KE Holdings, which runs China’s Beike.
The largest IPO in Indian history saw Paytm go public last year, but in the months after the IPO, the share price of the company fell as low as 70% below the IPO price. The 17.5% stake SoftBank possessed in the company prior to Thursday’s share sale is only worth approximately $900 million, despite the fact that it has invested $1.6 billion over the years, making it one of SoftBank’s largest investments in India.