SoftBank in talks to invest big money in Paytm Mall

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SoftBank has held early discussions to invest more in Paytm Mall even as it makes up its mind about selling its significant minority stake in rival Flipkart to Walmart, said two people familiar with the development.

The Japanese Internet giant could be freed from a clause in its agreement with Flipkart that restricts it from investing more than $500 million in Paytm Mall until 2020, one of them said. SoftBank, which in April announced a $400 million investment in Paytm Mall for a 21% stake, has since held talks to invest as much as $3 billion in the company, the second person said. ET could not independently confirm this.

Atransaction is far from being finalised and may not go through, these people said, adding that talks with Paytm Mall would proceed only if SoftBank finalised its exit from Flipkart. SoftBank is undecided on selling its Flipkart shares because of tax implications and as it sees a further increase in valuation for Flipkart, ET reported on May 11.

A spokeswoman for SoftBank declined comment. Paytm Mall did not immediately reply to emailed queries from ET.

SoftBank Vision Fund invested about $2.5 billion in Flipkart in August last year after a failed attempt to orchestrate a merger with Snapdeal, which was its first bet in the Indian online retail space in 2014.

The Japanese company had invested about $900 million in Snapdeal in the hope the etailer would be able to challenge Flipkart’s market leadership, but saw the company slip to a distant third behind Amazon India by 2016.

SoftBank is expected to pocket about $4 billion if it sells its entire 21% stake in Flipkart to Walmart.

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