Japanese Investment major – ‘Softbank ‘ to sell 4.5% stake in Paytm for 200$ million.

Japanese investment major SoftBank will sell a third of its stake in One97 Communications Ltd, the owner of the Paytm payments app, through a $200 million (around Rs 1,627 crore) block deal . It will be looking to offlload 4.5% of the fintech company . SoftBank owns 12.9% of Paytm and is selling 29 million shares . The shares will be sold at a massive discount of around 70 per cent to the Paytm IPO price, a sign of massive wealth erosion the new-age tech firms have inflicted on investors amid fears that worse may follow for the stock

Selling of Shares at discounted rate –

Softbank is the second largest shareholder with a 17.5 per cent stake in One97 Communications. The shares are being offered to institutional investors at ₹ 555 – 601.45. At the lower end of the band, it is a 7.7% discount to the closing price of ₹601.3 on Wednesday. If completed, the sale will fetch SoftBank at least ₹1,628.9 crore or $200 million.The current holding of Softbank at closing price is valued at around $835 million.

Sole book runner of the deal –

Bank of America is the sole broker of the transaction. The sale follows the end of one-year mandatory lock-in for pre-IPO investors in Paytm. Paytm started trading on the bourses on 15 November 2021 after raising ₹18,300 crore in an initial share sale, the second biggest IPO so far in India. However, Paytm’s journey as a publicly traded firm quickly turned sour as the stock slumped 27% on market debut from its issue price of ₹2,150 apiece.

Which other company traded?

Amid the global tech slowdown that started last year, Paytm stock has remained below its IPO issue price, closing at ₹601.30 on Wednesday. The stock is trading at a 72% discount to its issue price.Even as Paytm shares could come under pressure, another new-age company that has traded in the red is FSN E-Commerce. The Nykaa parent listed more than 237 crore of bonus shares on the bourses.

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