SoftBank denies interest in picking up stake in Vodafone-Idea merger

Bank called media reports alleging such interest 'baseless' and 'substantiated'

Japanese investor Softbank has denied reports claiming that it was interested in picking up a stake in the Vodafone- Idea Cellular merger.

"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 has invested over $2 billion in India and its portfolio include investments in realty portal Housing.com, which was 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.

Interestingly, SoftBank first came here in 1999, when it launched eVentures India with NewsCorp's media fund ePartners and P K Mittal of Ispat Group. According to a report in Mint, the fund invested $43 million in 14 companies, before succumbing to the 2000-01 dot-com bust. It exited three investments, wrote-off six, and sold stakes in four to Nexus Venture.

In 2001, it set up a new technology investment fund called SoftBank Asia Infrastructure Fund in  a joint venture with networking giant Cisco Systems. It invested in Sify Technologies and IL&FS Investsmart. In 2004, the fund managers struck out on their own and founded SAIF Partners.

SOFTBANK'S INDIA PORTFOLIO

InMobi, 2011

SoftBank's first investment in India, mobile advertising company InMobi was one of the first companies to enter the Unicorn club in India but it is facing stiff competition from Facebook and Google. InMobi had losses of $40.91 million in 2015-16 and $45.5 million in 2014-15.

Housing, November 2014

SoftBank invested $100-million in real estate portal Housing.com. It's CEO Rahul Yadav was asked to step down after a run-in with investors. After layoffs and restructuring, Housing was acquired by NewsCorp-backed realty portal PropTiger in a recent deal.

Ola, April 2015

SoftBank led a $400-million Series-E fund-raising by taxi aggregator Ola, which also saw investments by DST Global, Tiger Global, Steadview Capital, Accel, ABG Capital, Mauritius Investments, Falcon Edge Capital and GIC. 

Snapdeal, August 2015

SoftBank led a $500-million fundraising round by e-commerce major Snapdeal, which also saw investments by Alibaba, Foxconn, Blackrock, Myraid, Temasek. As Amazon steps up its presence in India, others e-com sites are feeling the pressure. 

OYO Rooms, August 2015

SoftBank led a $100-million fundraising by realty portal Housing.com, which also saw investments by Alibaba, Foxconn, Blackrock, Myraid, Temasek. In April 2016, OYO again raised $100 million from SoftBank, Greenoaks, Sequoia & Lightspeed.

Grofers, November 2015
 

SoftBank led a $120-million Series-C fund-raising by e-grocer Grofers, which also saw investments by Tiger Global Management and Sequoia Capital. Since then, Grofers has shut operations in nine cities and rival PepperTap has shut shop.

Hike, August 2016

SoftBank invested in messaging app Hike, when the Kevin Mittal-led firm raised $175 million in series D round from several investors that included Tencent, Tiger Global, SoftBank, and Bharti Enterprises – founded and chaired by the father of Hike’s CEO.

SBG Cleantech, December 2016
 

After announcing plans to invest $20 billion in the Indian solar sector, SoftBank won its first solar power project in India. Its joint venture company, SBG Cleantech, emerged as the lowest bidder for the 350 megawatt (Mw) project under the Jawaharlal Nehru National Solar Mission.