SoftBank Offloads 2 Per Cent Stake In Paytm, Sells 13.7 Million Shares

This move comes amid a significant decline in the fintech company's stock price, attributed to an ongoing regulatory crisis

SoftBank's stake in Paytm's parent company, One97 Communications, has been reduced to 2.83 per cent. ( Image Source :Getty )

SoftBank, the Japanese conglomerate, has sold over 13.7 million shares, representing approximately 2.17 per cent of Paytm, in the open market over the past month. This move comes amid a significant decline in the fintech company's stock price, attributed to an ongoing regulatory crisis.

As a result of these sales, SoftBank's stake in Paytm's parent company, One97 Communications, has been reduced to 2.83 per cent.

In a statement, SVF India Holdings (Cayman) Limited, a subsidiary of SoftBank, announced the disposal of 13,784,787 equity shares of One97 Communication Limited. The disposals occurred between January 23, 2024, and February 26, 2024, with a breach of the 2 per cent threshold specified in Regulation 29(2) of the SEBI Takeover Regulation noted in the transaction on February 26, 2024.

Sources familiar with the matter revealed that SoftBank had initially aimed for a slight net gain on its investment in Paytm. However, the drop in the stock's price, primarily due to regulatory actions by the Reserve Bank of India (RBI), has resulted in an estimated loss of $100-150 million for the Japanese investor on one of its significant investments in India.

This recent sale follows SoftBank's previous disposal of 12,706,807 equity shares between December 19, 2023, and January 20, 2024. During this period, the conglomerate divested shares worth approximately Rs 950 crores, reducing its stake from 7 per cent to about 5.01 per cent.

Paytm's stock faced a significant downturn following the RBI's crackdown on Payment Payments Bank on January 31. The stock plummeted by around 60 per cent before experiencing a partial recovery, hitting the 5 per cent upper circuit for multiple consecutive sessions.

As of Thursday, Paytm shares continued to trade in the red for the third consecutive session. At 9:30 am, the fintech stock was trading at a 5 per cent lower circuit at Rs 385.90 on the National Stock Exchange (NSE).