Loss from financial assets at FVTPL at $289 mn for Q1 of FY16, against gain of $804 mn a year ago
Japan’s telecom and internet conglomerate SoftBank Group has recognised a loss from its marquee investments in India, namely Snapdeal and Ola, for the three months ending June this year as compared with a gain in the comparable period last year.
According to SoftBank’s first quarter financial performance for FY16, the loss from financial assets at the fair value through profit or loss (FVTPL) was 30,283 million yen ($289 million) as compared with a gain of 84,272 million yen ($804 million) recorded in the same period of the previous financial year.
“This was due to recording a loss as the amount of changes in the fair value of the company’s financial assets at FVTPL, such as preferred shares of Jasper Infotech Private Limited, which owns Snapdeal in India, and ANI Technologies Private Limited, an operator of the taxi booking platform Ola, from March 31, 2016 to the end of the first quarter,” SoftBank said in a presentation following the results.
However, SoftBank said these decreases in the fair value mainly reflected the yen’s appreciation against the rupee at the end of the first quarter compared with the previous financial year-end.
SoftBank, which generally provides a performance indicator for companies such as Snapdeal and Ola, did not provide any such information in its latest quarterly filings. In fact, in its sequential quarter filing, the Japanese company mentioned that the gross merchandise value (GMV) of Snapdeal had risen by 90% for FY16.
Softbank became the majority shareholder in Snapdeal when it invested $627 million in 2014. In August last year, Snapdeal raised $500 million in fresh funds, largely from Chinese ecommerce firm Alibaba Group, Foxconn Technology Group and existing investor Softbank Group.
However, in the fiercely-competitive ecommerce market in India, Snapdeal has been locked in a three-way battle with Flipkart and Amazon. In the recent past, Snapdeal has been seen losing out to its bigger competitors. SoftBank has also been one of the key investor in Ola, which has pitched a strong fight with Uber. Ola, which also has been in the market for some time now, is looking to raise fresh fund to the tune of around $300-400 million.
SoftBank has been one of the bullish investors in the Indian ecommerce and start-up segment. Besides Snapdeal and Ola, it has invested in Oyo, Grofers, Inmobi, Hike Messenger and Housing.com.