According to the senior managing partner of the Vision Fund, SoftBank Group Corp. liquidated most of its investment in Paytm prior to regulatory scrutiny driving down the once-celebrated Indian fintech company’s stock.
SoftBank reduced their investment to approximately 5% as of January from approximately 18.5% during Paytm’s IPO in 2021. SoftBank has been selling off Paytm shares on a regular basis since at least November 2022.
Navneet Govil, a digital investor headquartered in Tokyo, told Bloomberg News on February 8 that he was becoming increasingly concerned about the regulatory framework in India as well as the license of Paytm Payments Bank Ltd.
The financial head of the Vision Fund stated, “We felt it was prudent to start monetizing,” as cited by Bloomberg. “We’re happy that we completed a significant amount of Paytm before the recent stock correction.”
A Bloomberg investigation of corporate documents reveals that SoftBank has been steadily offloading Paytm shares since at least November 2022 until this past month. The Japanese investor’s holdings in Paytm were down significantly from their approximately 18.5% stake at the time of the company’s first public offering in 2021, to as little as 5% as of January.
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Govil declined to respond when questioned about SoftBank’s intentions with regard to its remaining ownership.
Major issues with Paytm
Prior to Over the past two years, authorities have warned Paytm several times about transactions involving its well-known payments app and its banking division. As a result, the Reserve Bank of India has halted a large portion of the banking operation’s operations, which has caused Paytm’s stock price to drop by more than 40% from its peak in January, according to Bloomberg.
After four quarters of losses, SoftBank recently announced its first profit. The December quarter saw a profit for its Vision Fund as well. But exit activity has outpaced new bets by the startup investment arm, which now only has a small portion of the billions it formerly had.