Japanese Internet major and investor SoftBank is reportedly in talks to invest $1.2-1.5 billion in Vijay Shekhar Sharma’s Paytm, reports Livemint.
If the discussions materialise, the deal could value the One97 Communications Ltd-owned company at $7-9 billion, the report says, citing three people aware of the matter.
As per the deal, SoftBank will not only buy some shares from existing Paytm investor SAIF Partners and founder Vijay Shekhar Sharma but would also be investing money in the company. The payments company may also buy out Snapdeal-owned mobile wallet firm FreeCharge in a “fire sale, though the fundraising is not contingent upon the proposed buyout,” the report added.
With SoftBank on board, Paytm could also be seeking a way to balance out the control of China’s Alibaba Group Holding Ltd, currently its largest shareholder. Interestingly, the Japanese company was an early backer of Alibaba and its initial investment of $20 million turned into a stake worth more than $60 billion when Alibaba listed its shares in 2014.
SoftBank has been re-strategizing its plans in India after its investments in the county failed to yield encouraging returns. With a total investment of over $3 billion in the country, SoftBank is now pushing mergers and acquisitions to consolidate its portfolio. The Japanese major has reportedly been spearheading the talks for a possible merger of Snapdeal with rival Flipkart,