Paytm may face anchor lock-in period expiry heat as Softbank likely to sell 4.5% stake in firm for nearly 1,627 cr - sources

SoftBank, Paytm, Paytm share price: One-97 Communications, which operates under Paytm brand, is to face the heat of anchor investors' lock-in period expiry as second largest investor Softbank is likely to sell stakes in the company on Thursday through a block deal transaction.

According to PTI sources, Japan-based Softbank has started the process to sell a 4.5 per cent stake in One97 Communications for about USD 200 million (around Rs 1,627 crore) in a block deal, according to sources.

Softbank is the second largest shareholder with a 17.5 per cent stake in the company. With this transaction, the overall holding of Softbank in Paytm is likely to come down to 13 per cent.

Image Source: Stockedge

According to two sources aware of the development, Softbank has offered to sell shares in the price band of Rs 555 to Rs 601.55 apiece that are held through its subsidiary SVF India Holdings.

Softbank expects to raise around USD 200 million at the lower end of the price band, Rs 555. Paytm shares closed at Rs 601.45 at BSE on Wednesday.

The deal may fetch Softbank around USD 215 million at the upper end. Softbank had invested USD 1.6 billion in Paytm in the last quarter of 2017 and offloaded shares worth USD 220 million at the time of IPO.

The current holding of Softbank at closing price is valued at around USD 835 million.

"If we add USD 220 million that Softbank raised from selling stock at the time of Paytm IPO then about one-third of the investment that it made in One97 Communications has eroded," the source said.

Bank of America is the sole book runner for the deal.

The heat of anchor lock-in expiry was also witnessed in Nykaa operator FSN E-Commerce Ventures and Policybazaar operator PB Fintech. These companies including Paytm were listed on exchanges in November 2021.

With PTI Inputs