SoftBank posts first annual profit in four years, but Ola and Swiggy weigh on Vision Fund 2 in Q4
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Japanese tech conglomerate SoftBank Group booked an investment loss of $708 million for its Vision Fund 2 in the January–March quarter, citing the poor performance of Indian listed stocks as a key factor. Food and grocery delivery company Swiggy and two-wheeler manufacturer Ola Electric are the two Indian listed companies in SoftBank Vision Fund (SVF) 2's portfolio.'...some slowdown and drop in share price in portfolio in India was one of the reasons for that (loss on investments in SVF-2). Hopefully, we will be able to see some good recovery from there,' SoftBank director Yoshimitsu Goto said during the company's earnings presentation on Tuesday.SoftBank said that on a sequential basis, the fair value of investments held by SVF-2 in public companies was down 22% 'mainly due to share price declines in Swiggy and Ola Electric Mobility'.According to data from the National Stock Exchange, the share prices of Swiggy and Ola Electric declined by around 40% in the January-March period.Bengaluru-based Swiggy's stock, which listed on the exchanges last November, began sliding at the beginning of the year after quick commerce companies stepped up their cash burn amid rising competition. Swiggy, too, increased its cash burn on account of investments in quick commerce . For the March quarter, it reported a Rs 1,081 crore consolidated net loss During the period, Ola Electric also suffered market share losses in the electric two-wheeler segment to legacy rivals Bajaj Auto and TVS Motor as the company faced issues with its after-sales network.Despite losses from SVF-2's Indian listed portfolio companies, gains from SVF-1 helped SoftBank post a $3.5 billion profit in the fourth quarter, leading to its first annual profit in four years.SoftBank said that the fair value of SVF-1's investments rose 4.1% at the end of the fourth quarter compared to the previous quarter. The value of public portfolio companies increased 0.8%, supported by gains in Chinese ride-hailing firm DiDi and European used-car sales platform Auto1 shares, though partially offset by declines in omnichannel children's products retailer FirstCry and other holdings.Private portfolio companies saw a 6.6% rise, largely due to an increase in the valuation of TikTok-owner ByteDance, attributed to 'higher share prices of market comparable companies and its stronger business performance'.In the earnings presentation, Goto underscored that despite uncertainties arising from US President Donald Trump's trade policies, SoftBank plans to continue its investment activity.'In a highly uncertain environment, we would continue to conduct financial activities with prudence and boldness to build a solid foundation for net asset value,' Goto said.Buoyant until last year, the market for initial public offerings (IPOs) in India took a hit as a result of the US imposition of retaliatory tariffs. This has led to several new-age and tech companies taking a relook at their plans to go public.During fiscal year 2025, SoftBank said it sold positions worth $5.35 billion from SVF-1 and SVF-2, including full exits from 24 portfolio companies such as US food delivery platform DoorDash and Hong Kong-based AI company SenseTime, and partial exits from several others.While SoftBank did not sell any stake in Swiggy during its November IPO, it sold a stake worth around $25 million in Ola Electric's August issue. The Japanese investor sold a $110 million stake in Pune-based FirstCry, an SVF-1 portfolio company, during its IPO in August 2024.
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