SoftBank logs over Rs 9000 cr loss from Indian investments

Snapdeal

Snapdeal

If the sale materialises, it would mark a deal ahead of rumoured acquisition of Snapdeal by bigger rival Flipkart. NVP has been an early investor in Snapdeal.

The group noted in the report that the highly competitive nature of India's e-commerce market has made the trend of its business performance lower than initially anticipated.

Valued at $6.5 billion in February 2016, Snapdeal has seen the valuation shrink since then and industry watchers said the potential sale to Flipkart could be done at about $1 billion.

"SBG (SoftBank Group) recorded losses from financial instruments at FVTPL of JPY 1,60,419 million in its consolidated financial statements for the fiscal year ended 2017. This situation caused a material decrease in net asset value of Starfish Pte Ltd (holding company of Snapdeal) and, therefore, SBG impaired the carrying amount of its shares in the company, to the amount equivalent to its net asset value", it said in its financial report. SoftBank had written down $555 million (approximately Rs 3,692 crore) in Jasper Infotech and ANI Technologies - the two parent companies of Snapdeal and Ola, respectively - for the six months that ended in September 30 previous year, reported Moneycontrol.

"Snapdeal founders would get about $30 million each, while NVP could get close to $80 million stake in the merged/new entity and Kalaari could get about $70-80 million", sources said.

In the said annual report, the Japanese giant has yet again announced that it has written down the value of its investments by a hefty 160.42 billion yen (approx $1.41 billion). According to the filings with the registrar of companies (RoC), Snapdeal had Rs 1,072.2 crore as cash and bank balances as on March 31, 2016.

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SoftBank has invested about $1 billion into Snapdeal since 2014, but is facing a fierce competition from USA major Amazon which snatched the No.2 spot from Snapdeal.

The company's losses have widened to ₹2,311 crore in fiscal year 2016.

Currency fluctuations and market dynamics had also contributed to the loss.

In December, Ola raised $350 million from SoftBank, RNT Capital and Falcon Edge Capital at a valuation of $3.5 billion.

Besides Ola and Snapdeal, SoftBank has investments in OYO Rooms, messaging app Hike Messenger and on-demand grocery delivery platform Grofers.

SoftBank entered the Indian consumer Internet segment with a bang in 2014, writing big cheques for Ola and real estate platform Housing.com.

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