Paytm Shares Slump as Much as 10% After SoftBank Unit Cuts Stake
(Bloomberg) -- Shares of One 97 Communications Ltd., the parent of India's leading digital payments brand Paytm, plunged in Mumbai as a unit of Japan's SoftBank Group Corp. lowered its stake in the company.
SoftBank's SVF India Holdings (Cayman) Ltd. sold 29 million shares of Paytm at 555 rupees ($6.8) each, according to people familiar with the matter, raising 16.1 billion rupees. The trade -- equivalent to 4.5% of the Mumbai-listed firm's equity capital -- pulled down shares by as much as 10%, their biggest plunge since July 29.
Representatives for SoftBank and Paytm declined to comment on the pricing.
Paytm is among a number of Indian startups that went public last year amid a boom in IPOs and zest for the country's tech sector that have since suffered a slump in market value. When Paytm's founder Vijay Shekhar Sharma pulled off the IPO last November, it was the largest in the Indian market up to that point.
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The company raised 183 billion rupees, but its shares went on to plummet in what would become one of the Indian bourse's worst-ever debuts as investors shunned its high valuation and loss-making startup status. They are down about 75% from their IPO price.
Some early investors are making “desperate exits” as they grapple with the performance of their own funds amid a drop in global valuations, said Abhay Agarwal, a fund manager with Piper Serica Advisors Pvt. Still, these investors will make a profitable exit as their cost per share was lower than the current price, he added.
SoftBank is one of Paytm's biggest shareholders, along with Alibaba Group Holding Ltd. and its fintech affiliate Ant Group Co.
A representative for Paytm communicated earlier
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