Japan’s SoftBank Group sold a 4.5% stake in Indian digital payments giant Paytm on Thursday, leading to a sharp fall in the shares of the fintech company.
Paytm shares fell 10% on news of the trade, which comes a day after the lock-in period ended for investors in the company’s November 2021 bumper initial public offering (IPO).
SoftBank’s sale of 29.35 million shares was conducted through block deals for $200 million, executed at 555.67 rupees, two people with direct knowledge of the matter said.
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That was the lower end of the planned price range of 555 rupees to 601.45 rupees that was listed in the transaction’s term sheet.
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 September 30.
$50bn losses in six months
The sale is the latest in a string of divestments that 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.
SoftBank, Paytm, Millennium, Segantii, Ghisallo and Norges Bank did not respond to requests for comment.
The transaction was led by Bank of America, according to the term sheet.
Paytm went public last year in India’s biggest-ever IPO. It is among SoftBank’s biggest investments in India, with the Japanese conglomerate investing $1.6 billion into the digital payments firm over the years.
At Paytm’s current share price, however, the 17.5% stake SoftBank held in the company before Thursday’s share sale is worth only about $900 million.
- Reuters, with additional editing by Vishakha Saxena
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