Japanese investment bank Softbank representative on Indian fintech firms Paytm and Policybazaar. Munish Verma is stepping down from the companies’ boards. Two people in the know confirmed the development.
The decision to step down from the boards of the listed company is part of Softbank’s global strategy to not be on boards of listed companies.
Munish Varma, the managing partner of Japanese investment behemoth SoftBank, is preparing to step down from the boards of Paytm parent One97 communication and PB Fintech. In less than six months after the companies went public in India, said people familiar with the matter. Adding that an announcement to this effect will be made shortly to stock exchanges.
“Munish Ravinder Varma, Non-executive, Non-Independent Director of the Company, has tendered his resignation vide resignation letter dated March 14, 2022. With effect from the closure of business hours on March 14, 2022, due to personal commitments and other preoccupations,” Paytm said in a regulatory filing.
The action is consistent with SoftBank’s move globally—it steps away from board positions after its portfolio companies get listed. SoftBank will remain as an investor and retain its shareholding in both these firms, the people cited above said, asking not to be named.
PB Fintech, which owns brands like Policy Bazaar, Paisa Bazaar, also announced the resignation of Mr. Varma from its board. Softbank holds a 5.77 per cent stake in PB Fintech.
Japanese investor Softbank is pulling out its representative from the boards of Indian listed entities Paytm and Policy Bazaar as part of its global policy.
There will be, however, no change in investment made by Softbank in these companies, according to a source aware of the development.
“As part of global policy, Softbank’s representative will step down from the board of listed companies in India. At present, there are two Indian entities in this case- Paytm and Policy Bazaar. These companies have been informed about the decision,” another source aware of the development said.
SoftBank owns a 17.4 percent stake in Paytm and around 12.4 percent stake in Policybazaar. The fortunes of SoftBank soared with the public listing of PB Fintech which runs Policybazaar. The value of its stake escalated to over Rs 6,687 crore.
The move comes at a time when both stocks have been hammered in the last few months, amid a broader selloff in new-age listed stocks. While PB Fintech is down 28.57 percent from its issue price of Rs 980 a share. Paytm is down 67.67 percent from its issue price of Rs 2150 a share.
The company’s market capitalization slipped below ₹ 40,000 crores for the first time. On the day of its stock market debut on November 18, 2021, the market capitalization of One 97 Communications Ltd stood at ₹ 1.01 lakh crore.
On Friday, the Reserve Bank of India barred the company’s Paytm Payments Bank venture from accepting new customers, adding pressure to the company’s stock. The RBI decision is based on certain “material supervisory concerns”. The restrictions will continue pending a comprehensive audit of its information technology systems, the central bank said in a statement.
Paytm said in response that it is taking steps to comply, including the appointment of an external auditor. Existing customers aren’t affected.