SoftBank cut down most of Paytm stake before RBI crackdown: report

Photo credit: SoftBank

SoftBank Group sold a major chunk of its stake in India’s Paytm just before the central bank imposed sanctions that sent firm’s share price tumbling by over 42% within three days. Bloomberg reported the development, citing Navneet Govil, the Vision Fund’s executive managing partner and CFO.

According to Govil, SoftBank had sensed concerns about the increasing uncertainty in India’s regulatory landscape as well as the license status of Paytm Payments Bank – the fintech firm’s banking affiliate.

SoftBank’s stake in Paytm had gone down from 18.5% in November 2021, when the fintech firm was listed in India, to nearly 5% in January. It is unclear what SoftBank’s plans are with the remaining shares.

Paytm has landed in hot water since the Reserve Bank of India froze most of its banking operations on January 31, forcing users to switch to rival platforms. Downloads of rival apps like PhonePe and Google Pay reportedly had double-digit growth, while Paytm saw a 32% drop in the first week of February compared with the last week of January.

After a less-than-stellar performance over the past year, SoftBank reversed its fortunes in the December quarter, posting a net income of US$6.3 billion.

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