Softbank’s investment strategy in India is undergoing a shift as it prepares for the initial public offerings (IPOs) of several portfolio companies, including Firstcry.com and Ola Electric, which have already filed their draft prospectuses. Swiggy, another major player, is also gearing up to file its IPO papers soon, with expectations of a $1 billion IPO.
While Flipkart represents 9% of Softbank’s total India portfolio, fintech firm Paytm’s struggles have impacted its market value significantly. However, Softbank aims to capitalize on the IPOs of other successful ventures, potentially reaping substantial gains. These IPOs are projected to be valued at over $20 billion combined.
Although Softbank refrained from making investments in India in 2023, it plans to inject fresh funds into growth-stage companies in 2024. Over the past decade, Softbank has invested approximately $15 billion in India.
The recent crisis surrounding Paytm led to a sharp decline in Softbank’s investment value, prompting stake reductions. Despite this setback, Paytm’s shares have shown signs of recovery since the Reserve Bank of India intervened, providing a window for the company to address backend transaction concerns.
Softbank’s stake in Paytm dwindled to 6.46% by December, down from 17.47% at the end of 2021. The company has steadily reduced its stake over the years, with recent stake sales also including exits from Zomato and PB Fintech (Policybazaar), yielding substantial returns.
In the logistics sector, Softbank has reduced its stake in Delhivery to 11.77% by December 2023, down from 18.5% in June 2022. Despite these adjustments, Softbank’s global portfolio retained a fair value of $146.6 billion by the end of December 2023, according to its performance snapshot.