SoftBank gets Nexus' nod for selling Snapdeal to Flipkart

Inc Stock Will This $5 Billion Bet Pay Off

Inc Stock Will This $5 Billion Bet Pay Off

SoftBank - which has committed investments of United States dollars 10 billion in India - has been working on a plan to sell Snapdeal to larger rival Flipkart.

Japanese conglomerate SoftBank Group today said it has recorded loss from investments to the tune of $ 1.4 billion, or over Rs 9,000 crore, for 2016-17 in Indian startups like Snapdeal and Ola.

The statement comes on the same day as the Tokyo-headquartered company reported a 13 per cent jump in full-year net income, to ¥1.43 trillion for the 12 months ended March 31 that topped analysts' estimates and was driven, primarily, by cost cuts and an improved performance by its US-based wireless business Sprint.

Sources said that Snapdeal founders would get about Rs 160 crores each, while NVP could get close to Rs 643 crores and stake in the merged entity. "Financial instruments at FVTPL included preferred shares of Jasper Infotech, which runs, an e-commerce site in India, and ANI Technologie, which runs Ola, a taxi booking platform also in India", the annual says.

SoftBank is also the biggest investor in local ride-sharing platform Ola that's has an intense and ongoing battle with the United States tech major Uber. Though in early stages, SoftBank has held talks with bigger online grocer BigBasket for a merger with Grofers, as reported in TOI's January 16 edition.

As far asPaytm is concerned, reports suggest that in April SoftBank agreed to invest over $1.4 billion in Paytm.

However, a significant chunk of such investments have shown little signs of recovery, prompting SoftBank to scout for mergers.

Sources had highlighted that valuation has been one of the hurdles in the deal, as Kalaari Capital and Nexus were not in agreement with the valuation given by SoftBank.

While it has got most board members to agree to the proposal, it is yet to get a nod from Nexus Venture Partners (NVP). "After sustained discussions, they (Kalaari Capital) are now on board..." Ltd and Snapdeal parent Jasper Infotech Pvt. Ltd.

"Once the deal is done, Snapdeal founders Kunal Bahl and Rohit Bansal would leave the organisation", VCCircle quoted a person familiar with developments as saying.

The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space and change the landscape of the sector that is witnessing intense competition among players.

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