As the mandatory lock-in period for pre-IPO shareholders in Paytm ends, Japanese investor SoftBank is looking to sell $215 million worth of shares in the e-wallet and payments company.
Softbank will offer 29 million Paytm shares at ₹555-601.45 each, which is at a discount of up to 7.72 per cent to the current market price. Softbank had invested a total of $1.6 billion in the fintech company. But as Paytm’s share price has declined nearly 70 per cent from its IPO price, SoftBank’s remaining stake of around 17.5 per cent in the company is currently worth $900 million.
SoftBank, which has holdings in Policybazaar and Delhivery too, will offload its stake as soon as the lock-in period ends in the next 10 days, sources in the know said. In the three companies put together, Softbank would still be sitting on a profit of around $150-160 million, since it had cumulatively invested around $2.2 billion in them and offloaded shares worth $560 million during their IPOs.
Shares worth $14 billion in these newly-listed tech companies will be available to be sold in the market. Rules in India require a one-year lock-in period for pre-IPO investors when these companies got listed. That lock-in for at least 11 companies ends in the next few days, and hence it is feared that leading investors will dump all or part of their holdings in the market. These so-called tech companies were promoted as clones of Amazon, Alibaba, or Uber, but they have lost appeal among investors, which has seen their share price decline by 50-75 per cent from peak levels. When they were listed, these tech companies enjoyed a price-to-earnings multiple of between 500 and 2,000, which was unheard of in India.