Currently, SoftBank Vision Fund (SVF) owns over 113 million shares in Paytm, or 17.45% of the company. After the share sale, its ownership will drop to roughly 13.1%.
Digital Desk: The largest payment platform in India, Paytm, is managed by One97 Communications, and SoftBank intends to sell 29 million shares in that company. The international IT investor will trade shares via block trades on Thursday in the price range of Rs. 555 to Rs. 601.45. The share sale's starting price is around 8% less than Paytm's most recent closing price of Rs. 601.6. The Paytm share sale occurs shortly after the expiration of the one-year post-IPO lock up period. Paytm's stock fell by about 4% on Wednesday.
Currently, SoftBank Vision Fund (SVF) owns over 113 million shares in Paytm, or 17.45% of the company. After the share sale, its ownership will drop to roughly 13.1%.
At the low end, SVF will be able to raise Rs 1,610 crore, or about what it did when it sold shares in Paytm's first public offering. However, it offered shares for sale in the IPO at Rs 2,150 each. Shares of Paytm are currently 72% below their IPO price.
The average cost of acquisition per share for SVF, according to Paytm's offer document, comes out to Rs 1,820.2 per share, which is 66% less than the going market price.
Among the prominent shareholders of Paytm is Softbank. Others include Berkshire Hathaway, SAIF Partners, Alibaba Group, Ant Financial Services Group, and SAIF. After the September 2022 quarter, Ant owned 24.88% of Paytm, 6.20% of Alibaba, 15.09% of SAIF, and 2.41% of Berkshire.
With the lock up period coming to an end and doubt over when Paytm can become profitable, all eyes are on whether these shareholders, too, will make a rush for the exit.
Not all shareholders are currently in the red, unlike Softbank. According to the DRHP, Antfin and Berkshire's purchase costs are respectively Rs 1,833 and Rs 1,280 and Rs 583 for Alibaba.
In November 2021, Paytm issued a Rs 18,300 crore initial public offering. It was the biggest IPO to ever hit the domestic markets at the time, and it is still the largest today, trailing only state-owned LIC. A total of Rs 8,300 crore was raised through a new fund raising, while the remaining amount came from secondary share sales by several investors, including Softbank, Ant, and Mountain Capital Fund.
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