SoftBank’s Vision Fund, a powerhouse in global venture investing, has turned a profitable corner thanks to high-profile Indian IPOs. With significant returns from its stakes in Ola Electric, FirstCry, and Delhivery, the Vision Fund is experiencing a “harvest season” in India. As Indian startups race toward public listings, SoftBank’s vision for scaling innovation in emerging markets is paying off in remarkable ways.
Credits: Money Control
Indian IPO Boom: The Key to Vision Fund’s Turnaround
India’s IPO market has seen a recent surge, bolstering returns for global investors. For SoftBank, which has long bet on tech-driven ventures, the timing is ideal. The Vision Fund saw a cumulative gain of $1.349 billion (₹11,021.8 crore) from its Indian portfolio in the latest quarter, led by successful IPOs of Ola Electric and FirstCry. FirstCry contributed the largest slice, adding $642 million to the fund’s gains, while Ola Electric and Delhivery added $401 million and $306 million, respectively. SoftBank capitalized on these listings by selling shares worth ₹1,287 crore ($153 million) during the quarter.
FirstCry’s IPO Success: The Crown Jewel of SoftBank’s India Portfolio
FirstCry, the popular online retailer for baby products, recently went public with a strong premium listing of ₹625 per share, 34% above its issue price. This robust start underscored FirstCry’s value in SoftBank’s portfolio, contributing a hefty $642 million to the Vision Fund’s quarterly gains. However, despite its high-flying debut, FirstCry’s stock has since cooled, trading below the initial premium. Nonetheless, the successful IPO has cemented FirstCry as a valuable asset in SoftBank’s portfolio and a testament to India’s growing e-commerce market for niche products.
Ola Electric’s Roller-Coaster Debut
Ola Electric, another high-profile SoftBank investment, also hit the public market in August. It debuted at ₹76 per share but faced volatile trading in the following days. Despite this bumpy start, Ola Electric remains a cornerstone in SoftBank’s strategy, boosting the Vision Fund’s public portfolio valuation by 0.2% in the quarter. As one of India’s top electric mobility companies, Ola Electric embodies the rising interest in sustainable technologies, and SoftBank’s early investment in the company appears poised to deliver strong long-term returns.
Delhivery Adds Momentum as India’s Logistics Giant
Delhivery is in the forefront of India’s logistics sector, which is another lucrative area for investors, as a leading logistics and supply chain organization. Delhivery proved its dominance in India’s e-commerce industry with its $306 million contribution to SoftBank’s quarterly profits. As Delhivery expands and grows, it solidifies SoftBank’s position in India’s quickly growing e-commerce and logistics industries.
SoftBank’s Swiggy Stake Set for Next Big IPO Gain
SoftBank is keeping a close eye on Swiggy’s eagerly awaited initial public offering (IPO), which has already attracted a lot of investor interest. Three subscriptions to the $1.3 billion IPO demonstrated investors’ faith in the Indian food technology sector. SoftBank’s investment in Swiggy is currently valued at about $803 million, according to analysts, which represents a 78% rise from its initial investment in 2022. As SoftBank rides the tide of India’s IPO boom, it stands to gain more from Swiggy’s impending IPO.
A Strategic Shift for SoftBank: Exiting Select Investments
Beyond the recent IPOs, SoftBank has been reshuffling its portfolio with targeted exits. It exited Paytm in June, booking a gross loss of $544 million on a $1.6 billion investment, reflecting the challenges in India’s fintech market. However, SoftBank offset some of these losses with profitable exits, including gains of $394 million from Policybazaar and $65 million from Zomato. These strategic exits have allowed SoftBank to optimize its portfolio, doubling down on high-performing sectors while exiting underperforming assets.
“Harvest Season” in India: SoftBank’s Strategy Pays Off
Independent analyst Devi Subhakesan from Investory Pte calls this moment a “harvest season” for SoftBank in India. The Vision Fund’s strategy of patient capital and targeted tech investments is reaping significant returns. For instance, Subhakesan estimates SoftBank’s Swiggy stake alone to have appreciated by 78% since 2022. With multiple Indian IPOs bolstering its gains, SoftBank’s India-focused approach is proving successful, providing a model for how large-scale investors can thrive in emerging markets.
