BENGALURU: Japanese internet and telecom giant SoftBank recorded a jump of 49 per cent in its operating profit for the quarter ending June 30, 2018, attributed largely to the sale of its shares in Indian e-commerce major Flipkart. SoftBank invested about $2.5 billion in
Flipkart and will clock a return of $4 billion on the investment. This translates into a 60 per cent increase in the value of the initial capital pumped into the Indian e-tailer.
SoftBank’s Vision Fund, a $93-billion technology investing vehicle, had backed Flipkart last year. The Masayoshi Son-led SoftBank agreed to sell its 20 per cent holding in the Indian e-seller to the brick-and-mortar retailer
Walmart
in May this year.
Walmart is currently in the midst of getting a regulatory nod from Indian authorities on its transaction, which involved the US retailer picking up a 77 per cent stake in Flipkart. The deal is currently being scrutinised by the Indian fair-play watchdog
Competition Commission
of India (CCI).
“The company estimates that the sale of Flipkart shares will occur within 24 months of the inception of investment and has calculated a deferred tax at 43.68 per cent, being the Indian shortterm capital gains tax expected to apply on the sale of Flipkart shares,” SoftBank said. According to the firm, the tax could amount to around $644 million (71,746 million yen).
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