The Japan-based telecommunications company Softbank Corp. revealed in a statement today that it is to make a $627-million investment in the Indian e-retailer Snapdeal.com in order to expand its reach on the constantly growing online market in the country. The company also said that its Internet and Media Inc. business is to invest additional $210 million in ANI Technologies Pvt.
The Chief Executive Officer of Softbank, Masayoshi Son, said in the statement, cited by the Wall Street Journal: “We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade.” As reported by Bloomberg, Mr. Son also added: “As part of this belief, we intend to deploy significant capital in India over the next few years to support development of the market.”
The Japanese companys expenditures amount to a total of more than $800 million. Softbank said that its U.S.-based Internet investment arm, which is currently managed by Nikesh Arora, agreed to become the biggest shareholder in Snapdeal. The company also stated that it is to head a group of investors with a $210 investment in Ola Cabs.
Mr. Arora commented the news in a statement, cited by the Financial Times: “India has the third-largest internet user base in the world, but a relatively small online market currently. This situation means India has, with better, faster and cheaper internet access, a big growth potential.”
The two investment deals come after a meeting between Softbanks Chief Executive Officer Mr. Son and the Prime Minister of India, Narendra Modi.
Softbank Corp. was 0.05% down to close at ¥7 418 per share yesterday, marking a one-year decrease of 0.83%. The company is valued at ¥8.19 trillion. According to the Financial Times, the 12 analysts offering 12-month price targets for Softbank Corp. have a median target of ¥9 935, with a high estimate of ¥11 400 and a low estimate of ¥7 800. The median estimate represents a 33.93% increase from the last price of ¥7 418.
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