One-third of Softbank’s 12.9% stake in the fintech company, or 29 million shares, or 4.5% of Paytm, is being sold in the secondary offering.
The shares are being made available to institutional investors for a price range of 555 to 601.45, representing a discount of 7.72% to the lower end of the price range from Paytm’s closing share price of Wednesday of 601.45.
At the lower end of the price range, the stock sale will net Softbank $200 million. The block trade, which will be executed in the markets tomorrow, has only Bank of America as a broker.
Softbank’s block trade was executed as the one-year lock-up period for Paytm investors before the IPO ended on November 15.
The second largest initial public offering (IPO) in the Indian markets so far, Paytm raised 18.3 billion when it went public on local exchanges on November 15, 2021.
Paytm’s IPO story, however, quickly went south as the stock fell 27% in its market debut from its issue price of 2,150 per share. Shares of Paytm have remained below their IPO price during the global tech slump, ending at 601.45 on Wednesday.
Other tech companies that went public in the past year have used similar offerings. When Zomato’s IPO lockup ended earlier this year, investors such as Uber and Tiger Global sold some of their shares in the company. After its pre-IPO shares became openly tradable last week, Nykaa has also witnessed a number of block trades this week.
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