SoftBank marks down investment in Paytm parent to $800 mn

SoftBank Group Corp has marked down its funding in Paytm discern One97 Communications to $800 million, even because it mentioned an ancient lack of $26.five billion at its Vision Funds for the monetary ended March 2022, in step with its modern-day economic record launched on Thursday.

The Japanese conglomerate invested $1.four billion in Paytm thru its Softbank Vision Fund 1. The fund’s truthful price is marked at $800 million as of March 31, 2022, the record showed.

However, it’s far nevertheless withinside the cash with admire to its stake in every other Indian fintech organisation PB Fintech Ltd, which operates coverage aggregator Policybazaar that still changed into indexed final yr. Softbank Vision Fund 1 invested $one hundred million in Policybazaar and its truthful price has jumped 4x of the funding fee at $four hundred million.

Paytm’s inventory has taken a hammering withinside the capital markets because it was given indexed at the bourses in November final yr at an IPO rate of Rs 2,150. At the IPO rate, Paytm had a marketplace capitalization of almost Rs 1. four trillion ($18.6 billion), which has seen that decrease to Rs 33,443 crore ($four.33 billion) at Thursday’s ultimate rate of Rs 515. sixty-five in line with the percentage. Policybazaar no matter having a great starting at the inventory exchanges has additionally visible an awful lot of its marketplace cap erode this yr in step with the thrashing new-age agencies had been subjected to amid geopolitical uncertainties and worry of hobby price hikes through the Federal Reserve.

Paytm changed into now no longer the simplest organisation from Softbank Vision Fund 1’s worldwide indexed agencies that misplaced its truthful price. Apart from Paytm, 10 different agencies or 1/2 of the fund’s indexed portfolio had their truthful price priced beneath neath the funding fee.

For instance, Softbank Vision Fund 1’s truthful price in Chinese ride-hailing organization Didi Chuxing changed into down extra than 5 instances to $2.four billion from its funding fee of $12.1 billion and in workplace sharing corporation WeWork down to $six hundred million from $three.2 billion.

On the intense side, the fund’s truthful price in a number of its indexed agencies changed to better than the funding fee. They encompass Coupang with a truthful price of $8.2 billion in comparison to the funding fee of $2.2 billion. Its truthful price in Uber changed into additionally better at $2.2 billion as opposed to the funding fee of $2.1 billion.

Overall, Softbank’s Vision Funds — SoftBank Vision Fund 1 and SoftBank Vision Fund 2 — had a negative display withinside the final monetary ended March 31, 2022.

The Vision Funds published an ancient lack of 3434.7 billion yen (around $26.five billion).

Unrealized loss on valuation (net) totaled 2,922.three billion yen of the Softbank Vision Fund 1 portfolio especially because of a decline in the proportion costs of maximum indexed agencies, the record noted. The fall in percentage costs changed due to more than one factor, along with regulatory tightening, and the overall avoidance of high-increase generation shares in anticipation of better hobby rates, it stated. Growth withinside the truthful price of unlisted portfolio agencies changed into additionally slow due to that reason, it added.

The Vision Funds, which can be controlled through SBIA, an entirely owned subsidiary of the organisation set up withinside the UK, has around 450 agencies.

Softbank Vision Fund 1 made overall funding of $three.33 billion at some point of the monetary yr beneath neath review. It held eighty-two investments along with 22 indexed portfolio agencies) as of March 31, 2022. Softbank Vision Fund 2 made cumulative new and follow-on investments of $40.eighty two billion withinside the monetary yr, bringing the fund’s overall funding fee to $47.fifty four billion. The 2nd imaginative and prescient fund held 250 investments along with 14 indexed portfolio agencies at the quit of the monetary yr.

Last yr in India, Softbank’s Vision Funds invested in startups along with corporation software program platform Whatfix and bills generation platform operator JusPay Technologies.

In November’s final yr, SoftBank Investment Advisers CEO Rajeev Misra stated at a Bloomberg media occasion that it has deployed $three billion in 2021 and would make investments near to $five-10 billion this yr.

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Sharanya Sinha

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