SoftBank is “evaluating” selling around $1.5 billion worth of shares in Paytm’s parent company One97 Communications, in what would be its first tranche of dilution in the company’s proposed initial public offering (IPO), sources told Mint.
This comes amid news that the eight-member board of One97 Communications on May 28 gave in-principle approval for Paytm’s planned $3 billion IPO. Aimed for listing in November 2021 at valuation of $25-30 billion, this would be the biggest such issue in India yet.
If the share sale goes through, this would be SoftBank’s largest exit in India after Flipkart.
According to one source, existing investors in Paytm will have a “window to sell at least one-third of the overall stake on offer in the IPO on a pro-rata basis”, adding that SoftBank “may monetise 3-5 percent stake”, still leaving it with a still sizable 15 percent stake in One97 Communications, which “could be sold in parts after the IPO in subsequent issues”.
Moneycontrol could not independently verify the report.
This source further said that SoftBank may also offer to sell up at least 10 percent shares to the public in the listing, adding: “As the value of the stakes held by the existing investors is relatively higher than average Indian companies, the share sale can be done only in multiple tranches."
“SoftBank sees Paytm's IPO as a significant liquidity event and the 3-5 percent stake of SoftBank could be sold through the offer for sale (OFS) route that could be opened simultaneously with the IPO," the source added.SoftBank did not respond to queries, as per the report. A spokesperson for Paytm told the paper the company does not have information on share sales being planned by existing investors nor have they discussed this with the board.