In a recent development, SoftBank has divested an additional 2 percent stake in One97 Communications Ltd, the parent company of Paytm, through open market operations. This move, which took place over the past month, has generated approximately $300 million for SoftBank.
SoftBank’s Stake Sale Impacts Paytm’s Share Price
The share price of One97 Communications Ltd witnessed a decline of 2 percent to Rs 844.50 on July 18 at 12:04 pm, following SoftBank’s offloading of an additional 2 percent stake in Paytm. This sale by SoftBank is significant as it represents their largest listed investment in India.
Monetization Efforts by SoftBank in India
SoftBank’s decision to monetize its investments in India is not a new occurrence. With India being its third-largest investment destination and amid a funding drought, SoftBank has been actively offloading shares of Paytm through open market transactions over the past month. The majority of these shares were sold at a profit, as Paytm’s share price consistently remained above Rs 830 during this period. Notably, this marks the first time SoftBank has successfully sold Paytm shares at a profit since the company’s listing in November 2021.
SoftBank’s Stake in Paytm
SoftBank has been steadily reducing its stake in Paytm since November, either through open market operations or block deals. The recent sale has brought SoftBank’s stake in Paytm down to 9.15 percent. It is worth mentioning that the Japanese investor had a one-year lock-in period for the stock, which ended in November.
Paytm’s Collaboration with Goa Government for Digital Payments
Recently, One97 Communications Limited, the owner of Paytm, entered into a memorandum of understanding with the Goa government. This collaboration aims to facilitate digital payments across various departments, including panchayats and municipalities. Paytm intends to deploy its payment devices such as Paytm QR codes, soundboxes, and card machines to enable users to make convenient payments for services such as electricity, water, and municipal taxes.
Conclusion
SoftBank’s strategic stake sale in Paytm’s parent company highlights its ongoing efforts to capitalize on its investments in India. By divesting a portion of its stake in One97 Communications Ltd, SoftBank has generated substantial funds. Moreover, Paytm’s collaboration with the Goa government demonstrates the company’s commitment to expanding its digital payment services in India. As the financial technology sector continues to evolve, Paytm remains a key player in driving the digital revolution in the country.
