SoftBank in talks for stake buy in subsidiaries of Tata, Mahindras

SoftBank Investment Advisers, the Japanese investor, is said to be in talks with Tatas and Mahindras for a stake buy in one of their subsidiaries. According to a top official aware of these developments, the talks have been on for the last six months.

Both the conglomerates represent an interesting opportunity to invest, courtesy of a strong brand presence and an offline sales network, said Rajeev Misra, the chief executive for the investor at the ET Global Business Summit on Friday.

"…we are speaking to a couple of conglomerates, Tata (and) Mahindra," Misra said when asked if the investor would look at taking a bet on one of the conglomerate-promoted businesses like Tata Digital.

SoftBank has billions of dollars invested across the world and its domestic investments include payments focused Paytm and other unicorns. As per an August 2021 report, Tatas were looking to raise up to $ 5 billion as they go about building a 'super app' which will help it compete with the likes of Amazon and Reliance Industries' Jio Platforms.

Misra further said one of the key aspects for a conglomerate to be successful is nimbleness of the business vertical, less bureaucracy and independence of the management team.

“Quick decision making is essential in new age businesses and bureaucracy may not work,” he said while pointing out that many big companies have failed in their attempts to incubate businesses.

Speaking on Paytm's debacle at last year’s IPO, Misra said SoftBank was the second largest investor in the company after the Chinese Alibaba Group and the pricing was set by the company's board and the bankers.

From a value of $20 billion, the stock's market capitalisation is now down to $8-9 billion and the same has to go up, he said. He, however, added that other tech-enabled, consumer-facing companies like Lenskart and Policybazaar have better businesses for capital market debuts.