SoftBank Group Corp. reportedly divested a majority of its holdings in Paytm before regulatory scrutiny led to a significant decline in the shares of the once-lauded Indian fintech firm, as indicated by the executive managing partner of the Vision Fund, as per a Bloomberg report.
Navneet Govil, speaking to Bloomberg News on February 8, expressed that SoftBank Group Corp., a Tokyo-based tech investor, observed mounting uncertainty regarding India’s regulatory landscape, particularly concerning Paytm Payments Bank Ltd.’s license.
“We felt it was prudent to start monetizing,” the Vision Fund’s finance chief said, as quoted by Bloomberg. “We’re glad we did a good portion of Paytm before the recent stock correction.”
A Bloomberg analysis of company filings reveals that SoftBank has consistently offloaded Paytm shares since at least November 2022 until last month. As of January, the Japanese investor’s stake in Paytm dwindled to around 5%, marking a substantial decrease from the approximately 18.5% stake it held during Paytm’s initial public offering in 2021.
Over the past two years, regulators have issued multiple warnings to Paytm regarding the transactions between its widely-used payments app and its banking arm. The Reserve Bank of India has taken action by suspending a significant portion of the banking operation’s business, resulting in Paytm’s stock price plummeting by over 40% from its peak in January.
Being asked on SoftBank’s plans regarding its remaining stake, Govil declined to comment.
SoftBank recently announced its first profit after experiencing four consecutive quarters of losses, with its Vision Fund also achieving profitability in the December quarter. However, the startup investment arm’s new investments have significantly decreased to a fraction of the amounts it previously managed, and its exit activities have surpassed the pace of new investments.
