SoftBank Suffers Rare Japan Debut Drop After Record IPO

SoftBank Suffers Rare Japan Debut Drop After Record IPO

SoftBank Corp shares slumped more than 10 percent on debut, as investor appetite for Japan’s biggest ever IPO was hurt by a recent service outage at the telecoms operator and worries over its exposure to Chinese telecoms gear maker Huawei.

The poor start for the unit of investment giant SoftBank Group Corp was uncommon in the Japanese IPO market. Of 82 IPOs so far this year, SoftBank was only the seventh to open below the IPO price. Among recent major IPOs, Japan Display was the only one to flop, suffering a fall in its 2014 debut.

“Retail investors are dumping shares after seeing the opening below IPO price, also affected by a service outage,” a market analyst at a brokerage said, declining to be named because he was not authorised to talk to the media.

“But I don’t expect the shares will fall much further given their dividend yield and expectations for being included in stock indexes,” he said.

Following its $23.5 billion initial public offering, shares of SoftBank Corp fell as far as JPY 1,344 five minutes into trade, or 10.4 percent lower than its IPO price of JPY1,500. The broader Tokyo market was up 0.1 percent.

SoftBank Corp shares were most heavily traded on the Tokyo Stock Exchange’s first section, accounting for about a third of the total turnover volume.

At 10:48 a.m. (0148 GMT), the shares were at JPY 1,384, after opening at JPY 1,463. SoftBank Group was up 0.5 percent.

SoftBank Corp CEO Ken Miyauchi will hold a news conference at 0630 GMT.

The IPO was just shy of the world record $25 billion 2014 listing of Chinese e-commerce giant Alibaba Group Holding Ltd, a SoftBank Group portfolio company.

During the IPO period, Japan’s third-largest mobile phone network provider by subscriber numbers suffered a rare nationwide service outage, which it said would not affect earnings or dividends.

Adding to investor worries, SoftBank Corp’s relationship with Huawei Technologies Co came under scrutiny as governments around the world moved to shut out the Chinese firm amid worries its gear could facilitate Chinese spying.

SoftBank Corp, which has the most exposure to Huawei among Japanese telecoms firms, plans to replace Huawei-provided 4G network equipment with other suppliers’ hardware, two sources said, in a process likely to be time-consuming and expensive.

IPOs are popular among Japanese retail investors, many of whom see them as sure profit bets given their tendency to open much higher than offering prices.

In SoftBank Corp’s case, an added attraction was its promise of a dividend payout of 85 percent, much higher than those of rivals NTT DoCoMo and KDDI Corp.

The IPO attracted about twice as many retail orders as the number of shares offered, sources at lead underwriters said last week. A smaller portion of shares offered to overseas intuitional investors was three times oversubscribed.


SoftBank founder’s brother Taizo Son launches agri-food tech accelerator in India

SoftBank Group’s founder Masayoshi Son’s younger brother Taizo Son has launched an agri-food tech accelerator in India in partnership with Gurgaon-based GSF Accelerator and Indo-Japan business consultancy Infobridge.

Taizo Son’s Japan-based incubator Mistletoe, GSF and Infobridge floated the joint venture accelerator christened as ‘Gastrotope’ in Bangalore on Thursday.

Taizo Son is a tech entrepreneur and a prolific investor in his own right, while his brother Masayoshi Son has earned more fame, money and influence through his aggressive investments across the globe. Since its launch in 2013, Taizo Son’s Mistletoe has made over 90 investments globally that are worth around $160 million. Mistletoe has made three investments in India in startups such as Innerchef, Ninjacart and Kisan Network. Innerchef was started by GSF’s founder Rajesh Sawhney.

Taizo Son founded Mistletoe in 2013. He is also founder of Japan-based mobile gaming company GungHo, in which SoftBank acquired a 51% share in 2013 for $1.53 billion. GungHo bought back most of its shares from SoftBank last year.

The newly launched accelerator Gastrotope will focus on sustainable ideas and models in the ‘farm-to-fork’ value chain. It plans to create an agriculture and food-tech enabled industry ecosystem throughout this value chain and invest in startups that can add value at various stages, starting with farmers and moving to food transportation, processing and delivery to consumption.

“I have always believed that innovation comes from the connecting of diverse dots, and this time, with the bridge between India and Japan, unique solutions to the questions of food and agriculture will arise,” Taizo Son said. “We hope, while working with our partners here, we will become a catalyst for this new movement of farm-to-fork permaculture,” he said.

Sawhney said he will be working on creating a leadership team for Gastrotope. Other details such as the duration, number of startups, launch of the first batch and investment amount are yet to be finalised.

“Gastrotope is borne out of a vision of democratising healthy gastronomy experiences for millions. The food consumption habits are changing globally with a focus on nutrition and wellness and instead of food industrialization, the new goal is all about ‘what we grow’. Gastrotope seeks to play a vital role in catalysing India’s adoption of these trends through the birth of a new agriculture and food-tech ecosystem,” he said.

Besides Innerchef, Sawhney founded GSF that runs three programmes such as an accelerator, an angel network and tech conferences. The GSF accelerator programme has incubated over 40 startups in Delhi, Mumbai, and Bengaluru. Among these, investors have exited five startups, about 40% have raised venture rounds and over 80% have gone on to raise angel funding.

Infobridge has more than 10 years of experience in India, creating a bridge between India and Japanese businesses. It provides consulting and business development services to Japanese in India. The company has brought several Japanese startups to India.


SoftBank Loses $350 Million on India Investments Including Ola, Snapdeal

SoftBank Loses $350 Million on India Investments Including Ola, Snapdeal

SoftBank Loses $350 Million on India Investments Including Ola, Snapdeal
SoftBank wrote off JPY 39.28 billion in the value of shares in its India
The new set of numbers are lower than the loss recorded in November
The Japanese firm has so far invested close to $2 billion in India
Japan’s SoftBank Corp has booked an investment loss of JPY 39.28 billion ($350 million or roughly Rs. 2,345 crores) on its investments in India, including those in cab-hailing firm Ola and e-commerce company Snapdeal.

In the earning statement for nine months ended December, SoftBank wrote off JPY 39.28 billion in the value of shares in its Indian investments, which include Ola and Snapdeal.

“Gain or loss arising from financial instruments at FVTPL comprises mainly of changes in fair value of preferred stock investment including embedded derivatives, such as ANI Technologies and Jasper Infotech in India, designated as financial assets at FVTPL (Fair Value Through Profit or Loss),” SoftBank said in the earnings statement.

The new set of numbers are lower than the loss recorded by SoftBank in November last year.
It had booked an investment loss of JPY 58.14 billion ($560 million or roughly Rs. 3,472 crores) for the six-month period ending September 30, impacted by appreciation of Japan’s Yen against the local currency.

SoftBank had led a $210-million investment in Ola and $627 million in Snapdeal in October 2014. It made follow-on investments in both firms.

The Japanese firm has so far invested close to $2 billion in India and earlier this year it stated that it is looking to scale up investments to $10 billion in next 5-10 years.

Tags: SoftBank, SoftBank Earnings, SoftBank Investment, Ola, Snapdeal, India, Internet, Apps

[“Source-Gadgets”] raises Rs100 crore from Softbank

Currently, has 1.7 million verified listings and is working with over 40,000 developers and agents. Photo: Abhijit Bhatlekar/Mint

Currently, has 1.7 million verified listings and is working with over 40,000 developers and agents. Photo: Abhijit Bhatlekar/Mint

New Delhi: Mumbai-based Locon Solutions Pvt. Ltd, which operates the online real estate web site, has raised an additional Rs.100 crore in funding from Japan’s SoftBank Corp., the company said on Thursday.

“We are delighted to confirm our investment of additional Rs 100 crores in We continue to remain excited by Housing’s prospects and we know that this infusion will help Housing get to the next level and further consolidate its presence in the Indian real estate market,” said Jonathan Bullock, SoftBank’s representative on Housing’s board.

Housing plans to use the funds to drive its new strategy of building scalable revenue streams and going deeper in the value chain towards facilitating and fulfilling property transactions.

“Softbank is one of the world’s largest and most successful investors. Their continued support as both investors and advisors to is invaluable to us and signifies their long-term commitment to the company. We are now well-capitalized to aggressively execute on our focused strategy and growth plans and believe 2016 will be a great year for the company,” said Jason Kothari, chief executive officer with the company.

The company raised $90 million in a round led by Softbank in December 2014.

Last year was a largely forgetable one for Housing, whose board in July fired mercurial and controversial founder-CEO Rahul Yadav. Yadav’s departure from the firm was followed by the exit of other senior management.

Rishabh Gupta, who was appointed as interim CEO was also asked to leave by the board of directors, and was replaced by Kothari in November. Over 600 employees were also asked to leave.

There were rumours that the company could be merged with Snapdeal (run by Jasper Infotech Pvt. Ltd), in which Softbank is a major investor.

In August 2015, it was in talks to raise $100 million from Chinese conglomerate and investment firm Fosun International Ltd, but nothing came of it.

Also in August, Housing hired restructuring advisory firm Alvarez & Marsal Holdings LLC to help it streamline its investment plans, reduce cash burn rate and move towards profitability.

Since Kothari’s appointment, Housing has changed its business model. Founded in 2012 as a property listing portal, Housing started focusing on transactions.

Currently, has 1.7 million verified listings and is working with over 40,000 developers and agents. It has acquired entities including India Real Estate Forum, an online community for real estate; HomeBuy360, a sales management platform for developers; and Realty Business Intelligence, a data analytics and due diligence company for real estate.