Softbank loses $350 mn on investments in Snapdeal, Ola

NEW DELHI: Japan's Softbank Corp has booked an investment loss of 39.28 billion yen ($350 million) on its India portfolio that includes Ola and Snapdeal, even as it maintained that the markdown should not be seen as a reflection of the performance of these firms. In the earning statement for nine months ended December, Softbank wrote off 39.28 billion yen 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.

Jasper Infotech operates e-commerce firm Snapdeal, while ANI Technologies owns cab aggregator Ola.

A Softbank spokesperson said the current markdown should not necessarily be seen as a reflection of the performance of the portfolio companies.

"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," the spokesperson said.

The spokesperson added that the major investments, including Snapdeal and Ola, continue to be recorded on its books at a value in excess of blended cost basis.

"Softbank remains deeply committed to its portfolio in India and elsewhere in the world," the spokesperson added. The new set of numbers are lower than the loss recorded by Softbank in November last year.

It had booked an investment loss of 58.14 billion yen ($560 million) 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.