SoftBank, Japan Telecom Giant, has suffered a loss of USD 350 million on its investments in India. Softbank has invested in cab-hailing firm Ola and e-commerce company Snapdeal. The company has invested $697 million in the Snapdeal and $210 million in the Ola. However, Softbank has continued to sink money into both companies.
Japan Telecom Giant, Softbank Faces $350 million Loss on its Indian Investments
SoftBank said in the earnings statement
“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),”
In the last nine months, the company has faced a loss of $350 Millions. Moreover, the new loss value is lower than the loss recorded in last November. Last year till September 30, Softbank faced $560 million loss under same investments.
Two years ago, Softbank had announced plans to invest $10 billion in India by 2024. Since then the company has pumped $2 billion into internet-related projects and solar energy efforts in the country.
“With reference to the current markdown, portfolio company valuations are often driven by intricacies of accounting practices and currency fluctuations. and should not necessarily be seen as a reflection of their performance,”
A Softbank spokesperson said
“Our major investments, including Snapdeal and Ola, continue to be recorded on our books at a value in excess of our blended cost basis. SoftBank remains deeply committed to its portfolio in India and elsewhere in the world.”
Outside India, Softbank is performing very well and getting more profit. From April to December 2016, Softbank has recorded $7.6 billion net income. The increase is due to its sale of Alibaba shares. Due to its promising initiatives, it attracts high-profile investors like Apple, Qualcomm, and Oracle founder Larry Ellison.