Paytm shares fall 3% after SoftBank trims stake

Shares of One 97 Communications, the parent of Paytm, tumbled over 3% on Thursday after Japan-based SoftBank offloaded over 2% stake in the financial technology company. In November last year, the investment major sold nearly 4.5% shares in Paytm for ₹1,631 crore through an open market transaction after the one-year lock-in for pre-IPO investors ended.

Early today, Paytm shares opened marginally higher at 7₹30 against the previous closing price of ₹727.60 on the BSE. Paring opening gains, the stock declined as much as 3.3% to hit an intraday low of ₹703.30, while the market capitalisation falling to ₹45,049 crore. The largecap stock hit a 52-week high of ₹844.40 on August 8, 2022, and a 52-week low of ₹439.60 on November 24, 2022. The counter has risen 34% in a year and 33% in the calendar year 2023. In the last one month, Paytm shares climbed over 8%, whereas it added 5% in a week.

“SVF India Holdings (Cayman), a wholly owned subsidiary of SoftBank Vision Fund L.P., of which SoftBank Group Corp. is a limited partner, sold 13,103,148 shares between February 10 to May 8, 2023, which accounts to 2.07% of the total shareholding,” SoftBank informed stock exchanges. The company did not disclose the value of the stake sale, but it is estimated to be around $120 million. 

"SVF India Holdings (Cayman) Limited has disposed of an aggregate of 13,103,148 equity shares of One 97 Communications Limited in a series of disposals undertaken between February 10, 2023, to May 8, 2023, with the disposal on May 8, 2023, breaching the 2% threshold specified in Regulation 29(2) of the SEBI Takeover Regulations," as per the exchange filing.

Post the share sale, SoftBank will now have around 11.17% stake, or 70,809,082 shares, in Paytm.

The Japanese venture fund, which made a total investment of around $1.6 billion in Paytm, taken out $220-250 million by paring its stake in the company via IPO route in November 2021. In the country's second largest-ever IPO, the company had raised ₹18,300 crore via public listing of shares at an issue price of ₹2,150.

Last year in December, SoftBank sold around 5% of its stake in PB Fintech, the parent company of online insurance broker Policybazaar and loan business Paisabazaar, at a floor price of ₹440 per share. The Japan-based SoftBank Group has made a slew of disinvestment in the past six months in the new-age listed companies such as Delhivery and Zomato.

For the March 2023 quarter, the Vijay Shekhar Sharma-led fintech company registered a sharp decline in its net loss, driven by strong revenue growth and improvement in margins. The Noida-based financial technology company reported a consolidated net loss of ₹168.4 crore in the fourth quarter of FY23, against a loss of ₹761.4 crore in the same period of the previous year and a loss of ₹392 crore in the December 2022 quarter.

For Q4FY23, the revenue from operations stood at ₹2,334.5 crore, up 51.5% from ₹1,540.9 crore in Q4FY22 and 13.2% from ₹2,062.2 crore. The revenue growth was aided by rise in Gross Merchandise Value (GMV), higher merchant subscription revenues, and a surge in loans distributed through its platform.

On the operational front, Paytm’s EBITDA before ESOP cost improved by ₹602 crore YoY to ₹234 crore in Q4FY23 from a loss of ₹368 crore in the year-ago period. In the December quarter of 2022, EBITDA before ESOP cost was ₹31 crore.

The gross merchandise value (GMV), the value of goods sold via customer-to-customer or e-commerce platforms, jumped 40% YoY and 4.6% QoQ to ₹3.62 lakh crore in Q4 FY23. 

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