Japan’s Softbank investment division Softbank Vision Fund left Paytm in the June quarter at a loss of almost $150 million, PTI reported. “Softbank has exited Paytm at a loss of 10-12 per cent. The total loss is around USD 150 million,” one of the sources said.

In 2017, Softbank made incremental investments totaling over $1.5 billion in One97 Communications, the company that owns the Paytm brand. A little over 18.5 per cent of Paytm was owned by Softbank prior to the company’s 2021 IPO. It owned 1.2 per cent of the company through SVF Panther (Cayman) Ltd. and 17.3 per cent through SVF India Holdings (Cayman) Ltd. During the IPO, SVF Panther sold all of its shares for Rs 1,689 crore, or around $ 225 million.

Softbank had acquired Paytm shares at an average price of about Rs 800 apiece.

“Softbank announced that it will exit Paytm in 24 months from the time of the IPO. The exit was in line with Softbank’s plan. However, the company did anticipate loss at that time,” another source said as per PTI.

Paytm share price was listed at Rs 1,955, lower by 9 per cent, and has not matched its issue price of Rs 2,150 apiece to date. The share price of Paytm plummeted further after the Reserve Bank of India (RBI) banned its associate firm Paytm Payments Bank Ltd (PPBL) from carrying out transactions. It touched an all-time low of Rs 310 on May 9.

Paytm reported widening of losses to Rs 550 crore in the fourth quarter of 2023-24 following the ban on transactions related to its payments bank. The company during the reported quarter wrote off Rs 227 crore investment for a 39 per cent stake in PPBL following future uncertainties associated with its business operations, including the uncertainty of any other regulatory development, etc. In FY24, the company’s loss narrowed to Rs 1,422.4 crore. Paytm had recorded a loss of Rs 1,776.5 crore in FY23.

Berkshire Hathaway’s exit

Billionaire Warren Buffet’s Berkshire Hathaway Inc also exited Paytm around seven months back by selling shares at a lower-than-acquired price. The company had acquired 2.6 per cent stake in Paytm for Rs 1,279.7 per share at an aggregate value of Rs 2,179 crore, as per an official document. 

The shares were disposed of at an average price of Rs 877.29 apiece, taking the transaction value to Rs 1,370.63 crore in November.

(with inputs from PTI)