Flipkart stake sale pushes up SoftBank June quarter profit by 49% | RetailTechPodcast

Flipkart stake sale pushes up SoftBank June quarter profit by 49%

Japanese telecom and technology giant SoftBank Group Corp. posted a 49.2% jump in its first-quarter operating profit fuelled by its stake sale in India's largest e-commerce company, Flipkart. SoftBank's profit for the quarter of April to June stood at 715 billion yen compared with 479 billion yen a year ago, the company reported on Monday. Softbank said its operating income was boosted by a valuation gain of 244.9 billion yen at Vision Fund; a valuation gain of 164.3 billion yen was recorded for Flipkart based on the expected sales price, following the sales agreement. SoftBank held nearly 21% stake in Flipkart and had invested $2.5 billion in it through its Vision Fund. With a valuation gain of $1.5 billion on the Flipkart investment, as cited by the company on Monday, SoftBank stands to make 60% returns on the investment. "The company estimates that the sale of Flipkart shares will occur within 24 months of the inception of the investment and has calculated the deferred tax at 43.68%, being the Indian short-term capital gains tax rate expected to apply to the sale of Flipkart shares," the company said on Monday. Besides Flipkart stake sale, the company's profit was also boosted by the sale of its majority stake in chip designer ARM Holding's Chinese operations to a group of local investors. Read more