Japanese investor SoftBank, which booked a profit of more than Rs 100 crore after offloading a partial stake in food delivery platform Zomato this week, is looking to fully exit the company via open market transactions in the coming months, people familiar with the matter have said.
The Zomato block deal on August 30 marked yet another instance of a profitable secondary share sale for the Japanese investor in recent months. SoftBank has another 2.18 percent stake in Zomato, which it is also looking to offload via block deals in the coming months, sources said.
SoftBank sold 10 crore Zomato shares at an average floor price of Rs 94.70 apiece against an average cost price of Rs 83-85, netting a profit of Rs 10-12 a share.
SoftBank got a stake in Zomato after the food tech unicorn acquired quick commerce company Blinkit, formerly Grofers, in June 2022.
The Japanese investor entered Zomato at a little under Rs 71, but if blended with its original investment in Blinkit, which was written down significantly, the average cost price for SoftBank amounted to around Rs 85 a share, sources said.
“Zomato is not SoftBank’s original investment, so the investor won’t hold onto the stake,” a source said.
“For SoftBank, Zomato is just a monetary transaction, unlike Delhivery, Paytm or PB Fintech, which it entered as a direct strategic investor. So, it is looking at the deal only from a monetary perspective. It was waiting for Zomato to turn into a profitable bet and now that it has, it will look to exit the company fully as and when it gets opportunities,” the source added.
SoftBank and Zomato declined to comment.
Tiger Global also exited Zomato fully earlier this week after selling 12.34 crore shares, or a 1.44 percent stake, in the food tech player.
SoftBank’s India play
Earlier this month, Moneycontrol reported how SoftBank was sitting on gains of close to $550 million on its listed portfolio companies in India in the first half of 2023. The gains were fuelled by a sharp rally in shares of Zomato, Paytm (One97 Communications), Delhivery and PB Fintech.
SoftBank, a prolific technology investor in India, has not invested in a single deal this year yet but has been capitalising on monetisation opportunities aggressively this year, both in private and public markets.
In June, Moneycontrol exclusively reported that SoftBank would be selling stakes in Paytm and Zomato through open market transactions, as both new-age stocks had rallied turning into profitable bets for the Japanese investment conglomerate.
Since then, SoftBank has sold 2 percent stake in Paytm via open market operations, garnering around $200 million. It also sold a stake in IPO-bound Lenskart to ChrysCapital, when the eyewear company raised a massive $600 million funding round, which largely had secondary transactions.
According to Rajeev Misra, CEO of SoftBank Investment Advisers, finding the right investment opportunity has been a constraint for the Japanese investor.
In an interview to Moneycontrol in July, Misra said that he thinks India’s market is definitely “overestimated” and founders will need to reprice themselves if they want to raise funds.
Misra also said SoftBank, which has backed over 20 of the country’s 107 unicorns, may participate in some follow-on rounds in its portfolio companies. Among SoftBank’s portfolio companies, upskilling edtech unicorn Eruditus is in the market to raise about $150 million.
Last week, Moneycontrol reported SoftBank was in preliminary talks with IPO-bound direct-to-consumer unicorn Mamaearth to lead a $120-150 million pre-IPO round. If the deal deliberations fructify, it will be one of the rare pre-IPO rounds for SoftBank.
On August 30, Zomato ended at Rs 99.70 on the National Stock Exchange, up 5.28 percent from the previous close.
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