SoftBank Poised for Major Gains with Ola Electric, Firstcry, and Swiggy IPOs

Ola Electric Mobility, founded by Bhavish Aggarwal, is set to start its IPO on August 2. Another SoftBank-backed company, Firstcry, plans to go public in mid-August. Unicommerce, a software business spun out from Snapdeal, and food delivery company Swiggy are also preparing for IPOs, with Swiggy aiming for a launch around Diwali.

Details of the Moves

Ola Electric’s IPO will combine new shares worth ₹5,500 crore and an offer-for-sale (OFS) of 84.9 million shares. SoftBank, holding around 21.98% of the company, plans to sell nearly 30% of its shares. The IPO is expected to value the company between $4.5-$5 billion.

SoftBank first invested in Ola Electric in July 2019, with $250 million. Now, SoftBank stands to make over three times that amount. Similarly, SoftBank invested $300 million in Firstcry in 2020, and has already sold stakes worth $320 million. Currently, it holds around 25% of Firstcry. SoftBank plans to sell one-sixth of its stake in Firstcry’s IPO, potentially earning $150-$180 million.

At the projected IPO values, SoftBank could gain $1 billion from both Ola Electric and Firstcry, including previous partial exits.

Kashyap Chanchani, managing partner at The Rainmaker Group, noted SoftBank’s disciplined approach to exits has yielded strong risk-adjusted returns in India.

SoftBank’s India Portfolio

SoftBank’s Indian investments have grown to nearly $14 billion as of December 2023. Since opening its Mumbai office in November 2018, SoftBank has pulled out over $5.5 billion from its Indian investments, including $1.5 billion between 2022 and 2023. This includes selling stakes in companies like Lenskart and Firstcry, and profits from listed companies like Paytm, Zomato, Delhivery, and Policybazaar.

Recently, SoftBank made ₹3,115 crore from selling Zomato shares and ₹1,690 crore from Delhivery. It also exited fintech firm Paytm over the past year.

From its $6 billion investment in India, SoftBank has returned at least $6.6 billion so far.

Upcoming Tech IPO Wave

Since the first wave of Indian tech IPOs in 2021, such as Paytm, Nykaa, and Zomato, many SaaS and consumer tech firms have gone public. This includes MapmyIndia, RateGain, Zaggle, and Mamaearth. The pace of tech IPOs is expected to increase, with more SoftBank-backed companies joining the market.

Abhishek Bhagat of JM Financial predicts 20-25 internet and enterprise tech companies will seek public listings in India over the next 24 months. He expects this trend to significantly alter the composition of the Nifty50 index, similar to changes seen in the US markets.

More SoftBank Investments

Other potential SoftBank-backed IPO candidates include Flipkart, OfBusiness, and Lenskart. Oyo has also indicated plans to file for an IPO again. SoftBank’s other significant investments in India include Polygon, ElasticRun, Juspay, Cars24, Meesho, MindTickle, Whatfix, Zeta, Unacademy, and Eruditus.