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Softbank has sold its stake in Paytm, incurring a loss of approximately $150 million.

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In the June quarter, Softbank Vision Fund, the investment arm of Japan's Softbank, exited its investment in Paytm at a loss of approximately USD 150 million, according to sources familiar with the situation. Softbank had invested about USD 1.5 billion in One97 Communications, the company behind the Paytm brand, in several installments in 2017.

"Softbank exited Paytm with a 10-12 percent loss, totaling around USD 150 million," one source noted. Before Paytm's initial public offering (IPO) in 2021, Softbank held around an 18.5 percent stake, consisting of a 17.3 percent stake via SVF India Holdings (Cayman) Ltd and a 1.2 percent stake through SVF Panther (Cayman) Ltd. SVF Panther sold its entire stake during the IPO for Rs 1,689 crore, equivalent to about USD 225 million.

"Softbank had planned to exit Paytm within 24 months of the IPO. Although the exit was as planned, the loss was anticipated," another source added. Softbank had purchased Paytm shares at an average price of approximately Rs 800 each.

Paytm's shares were listed at Rs 1,955, a 9 percent drop from its issue price of Rs 2,150, and have not reached the issue price since. The share price further dropped after the Reserve Bank of India (RBI) barred Paytm Payments Bank Ltd (PPBL) from conducting transactions, hitting a low of Rs 310 on May 9.

In the fourth quarter of 2023-24, Paytm reported increased losses of Rs 550 crore following the transaction ban on its payments bank. During the same quarter, the company wrote off Rs 227 crore investment for a 39 percent stake in PPBL due to uncertainties in its business operations and potential regulatory developments.

For the fiscal year ending March 31, 2024, Paytm's loss narrowed to Rs 1,422.4 crore, down from Rs 1,776.5 crore in FY23. Seven months ago, Warren Buffet's Berkshire Hathaway Inc also exited Paytm by selling shares at a lower-than-purchased price. Berkshire Hathaway had acquired a 2.6 percent stake in Paytm for Rs 1,279.7 per share, totaling Rs 2,179 crore, but sold the shares at an average price of Rs 877.29 each, amounting to Rs 1,370.63 crore in November.

On Friday, Paytm's shares closed at Rs 467.25 each.


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