SoftBank, which of late has not been signing new startup funding deals in India and is preparing to offload stakes in IPO-bound Ola Electric and FirstCry, still holds $1.1-1.2 billion worth of shares in its listed portfolio companies here.
The Japanese investor has sold stakes worth $1.8-1.9 billion during the public offerings and through post-listing sales in four Indian startups — Paytm, Zomato, PB Fintech and Delhivery — that went public in 2021 and 2022. It had invested a total of $2.3-2.4 billion in these four new-age companies.
SoftBank’s strategy to dilute holdings through secondary sales while staying away from new investments is in line with most growth and late-stage investors who have slowed down on investments over the last 15-18 months.
SoftBank, which has funded almost a fifth of India’s over 100 unicorns — startups with valuations exceeding $1 billion – has so far invested $15 billion in the country. Of this, $11 billion had been invested by SoftBank Vision Fund. The group invested the remaining $4 billion in sectors such as renewable energy and infrastructure.
SoftBank is the largest institutional shareholder of electric two-wheeler maker Ola Electric and retailer FirstCry. Both companies filed draft papers for their initial public offerings last month.
While Ola Electric is looking for a $7-8 billion valuation in its public offering, FirstCry is estimated to be valued at around $4 billion. At these valuations, SoftBank is expected to sell stakes worth approximately $180 million in FirstCry and $45-50 million in Ola Electric.
In Ola Electric, SoftBank will be selling 23.8 million shares, representing a 0.65% stake, while in FirstCry, it is planning to offload 20.3 million shares, or a ~4.5% stake, as per their draft IPO documents. After the IPO, it would still hold stakes worth an estimated $840-850 million in FirstCry and $1.4-1.6 billion in Ola Electric, at IPO valuations.
The story so far
SoftBank had invested $1.6 billion in fintech company Paytm, has so far realised $800-900 million of its stake, and is still holding another $550 million worth of shares at the current stock price. In the Paytm IPO, SoftBank had sold shares worth around $250 million.
Among the four listed companies, Paytm is proving to be a drag on SoftBank’s investments in India. The financial services firm’s stock ended Monday’s trade at Rs 646.25, nearly 70% lower than its IPO price of Rs 2,150 in 2021.
With PB Fintech, the Gurugram-based parent of Policybazaar, where it had invested about $200 million, SoftBank has already realised returns of three to three-and-a-half times by offloading stake worth $650 million. It is still holding a stake worth another $130 million.
In Zomato, SoftBank got a stake through its $300 million investment in quick-commerce platform Blinkit (then Grofers), which Zomato acquired in 2022 in an all-stock deal. The investor has grossed $340 million by selling its stake in Zomato.
In the new-age logistics firm Delhivery, where SoftBank still holds around 12%, the investor has realised around $200 million from paring its stake. It had invested a total of about $380 million in the Gurugram-based company, where it still holds a stake worth $400-450 million.
Beyond the listed space too, SoftBank has made exits in new economy companies — the biggest being Flipkart where the investor sold its 20% stake to Walmart for $4 billion in 2018. SoftBank had invested about $2.5 billion in the ecommerce marketplace.
In 2021, however, SoftBank re-joined Flipkart’s cap table, as a co-leader in a $3.6 billion funding round through SoftBank Vision Fund-II.
More recently, the investor made a secondary stake sale in Lenskart as a part of the eyewear retailer’s $600 million funding round, realising an estimated $90-100 million from the deal.
In August, SoftBank Vision Fund’s executive managing partner and chief financial officer Navneet Govil told ET in an interview that in addition to FirstCry, several other portfolio firms including food-delivery platform Swiggy, business-to-business ecommerce player OfBusiness and Lenskart were also in various stages of preparing for their IPOs.
