SoftBank in talks with Tata and Mahindra for stake buy in their subsidiary, says bank’s top official

Japanese investor SoftBank Investment Advisers is in talks with Tatas and Mahindras for a stake buy in one of their subsidiaries, a top official said on Friday.

The talks have been on for the last six months and both the conglomerates represent an interesting opportunity to invest, courtesy strong brand presence and an offline sales network, Rajeev Misra, the chief executive for the investor, said at the ET Global Business Summit.

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"...We are speaking to a couple of conglomerates, Tata (and) Mahindra," Misra said while replying to a question if the investor would look at taking a bet on one of the conglomerate-promoted businesses like Tata Digital.

SoftBank has billions of dollars invested across the world and its domestic bets include payments focused Paytm and other unicorns.

As per an August 2021 report, Tatas were looking to raise up to USD 5 billion as they go about building a 'super app' which will help it compete with the likes of Amazon and Reliance Industries' Jio Platforms.

Misra further said one of the key aspects for a conglomerate to be successful is nimbleness of the business vertical, less bureaucracy and independence of the management team.

Quick decision making is essential in new age businesses and bureaucracy may not work, he said, pointing out that many big companies have failed in their attempts to incubate businesses.

Speaking on Paytm's bombed initial public offering, Misra said SoftBank was the second largest investor in the company after the Chinese Alibaba Group and the pricing was set by the company's board and the bankers.

From a value of USD 20 billion, the stock's market capitalisation is now down to USD 8-9 billion and the same has to go up, he said.

He, however, added that other tech-enabled, consumer facing companies like Lenskart and Policybazaar have better businesses for capital market debuts.