“We would like to categorically deny SoftBank’s participation in the alleged Vodafone-Idea Cellular merger in India. We underline that we have held no such discussions and media reports about the same are baseless and unsubstantiated,” Softbank said in a written statement according to media reports.
The denial comes in the wake of a news report which claimed that the Softbank was in talks with Vodafone to pick up stake in its Indian unit. Shares of Idea Cellular shares were trading 6.89 per cent higher at Rs 120.20 on the BSE at about 3.28 pm. The stock also saw a sharp spurt in trading volumes, with over 23,000 shares traded till 3.30 pm.
According to its latest nine-month earnings report, SoftBank has recorded $350 million in losses from its Indian portfolio including in companies that own ANI Technologies, which runs taxi aggregator Ola and Jasper Infotech, the parent company of online marketplace Snapdeal. This is the second consecutive write down by the telecom-cum-internet giant after it cut $555 million from its India portfolio in September-end last year.
Softbank’s Indian portfolio consists of investments in realty portal Housing.com, which was recently acquired by NewsCorp-backed PropTiger, cab aggregator Ola, e-commerce player Snapdeal, budget hotel aggregator Oyo, and on-demand grocery firm Grofers.
Some Softbank investors had questioned Nikesh Arora’s track record and investments in India, especially in companies like Housing.com. Many of these investments were made at the height of the start-up boom, which saw investors racing with each other to invest in Indian start-ups.
China and the US saw a boom in e-commerce and as penetration of mobile grew in the country, many e-commerce companies listed huge valuations. Investors felt the same story would play out in India, and bet on emerging start-ups in 2014 and 2015, at huge valuations.
Investors were driven by a fear of missing out as they raced to invest in start-ups and drove valuations. SoftBank, which was a relatively late entrant in India, took aggressive bets in India, investing in five start-ups in seven rounds within a year.
A month after Arora came on board, SoftBank announced two big investments in India: US$210 million in taxi app Ola and US$627 million in e-commerce biggie Snapdeal, according to a report in TechinAsia. It also bet US$100 million on Indian real estate start-up Housing, an investment investors have questioned.