SoftBank Group Corp. on Thursday, according to sources speaking to Reuters, managed to sell a 4.5% ownership in Indian electronic payments against Paytm via block agreements for $200 million, which caused a dramatic decline in the value of the Indian company’s stock.
According to two persons with firsthand knowledge of the situation, the price of the sale, which fell inside the term sheet examined by Reuters’ pricing range of 555 to 601.45, was 555.67 rupees.
As per Reuters’ calculations
Reuters calculations show that SoftBank received $200 million in total compensation for selling 29.35 million units at that rate. The news of the transaction, which came a day after the lock-in window for shareholders in Paytm’s November 2021 IPO closed, caused Paytm shares to drop by more than 9%.
The second-largest stakeholder of Paytm, whose prices have fallen over 60% because it came out publicly a year ago, is SoftBank’s, Vision Fund. As of September 30, SoftBank owned a 17.5% stake in Paytm.
The transaction is the most recent in a series of asset sales made by SoftBank in recent months ever since the flagship Dream Fund unit suffered losses of roughly $50 billion in only six months.
According to one of the individuals with direct knowledge of the situation, Ghisallo Capital Management, Segantii Capital Management, Millennium Capital, and hedge funds including Norges Bank are among the other buyers of the shares in addition to other investors.
Charge Of Transaction
Considering that they weren’t yet permitted to talk about the subject publicly, the sources refused to be named. Requests for comments from Norges Bank, Ghisallo, Millennium, Paytm, SoftBank, and Segantii went unanswered.
As per the term sheet, Bank of America was in charge of the transaction. For insightful comments and encouragement of $5.6 billion, Vision Fund sold a variety of businesses in the April-June quarter, along with the ride-hailing company Uber Technologies, the real estate platform Opendoor Technologies, and KE Holdings, which runs China’s Beike.
The largest IPO in Indian history saw Paytm go public last year, but in the weeks after the IPO, the share price of the company fell as low as 70%.