Japan's SoftBank to Invest $10 Billion in India; Snapdeal to Get $627 Million
New Delhi: Japanese telecom giant SoftBank on Monday said it plans to invest $10 billion or Rs 61,000 crore in India in a bid to aggressively expand beyond its home base. The cash-rich company will invest in India's IT, communications and e-commerce sectors, where it sees immense potential. India has the world's third-biggest Internet user base.
Monday's mega announcement was followed by a deal to buy a stake worth $627 million (Rs 3,825 crore) in online retailer Snapdeal. Tuesday's deal will make SoftBank the biggest investor in India's third largest e-tailer. (Read: Snapdeal to Get Record $627 Million Investment From SoftBank)
The investment in Snapdeal is the largest in India's growing e-commerce sector since industry leader Flipkart raised $1 billion (Rs 6,100 crore) in July. (Also read: Flipkart Raises $1 Billion to Take on Amazon)
SoftBank will also invest in an Indian logistics business in a separate deal, the company said today.
Both deals were negotiated under newly appointed SoftBank vice chairman and SoftBank Internet and Media Inc's chief executive Nikesh Arora, who had quit Google in July.
SoftBank's investment decision, probably the biggest by a Japanese firm, comes a month after Prime Minister Narendra Modi's visit to Japan in September and will give a big boost to his campaign to attract foreign direct investments (FDI) in the country.
"The visit of Prime Minister Narendra Modi to Japan has created a climate of hope and optimism about greater economic cooperation between the two countries," said SoftBank chairman and CEO Masayoshi Son.
SoftBank made waves with its plans to grow outside its home base last year when it bought No. 3 US mobile carrier Sprint Corp for $21.6 billion (Rs 1.3 lakh crore). The company said earlier this month that it was taking a minority stake in Hollywood movie studio Legendary Entertainment for $250 million (Rs 1,525 crore).
($1 = Rs 61)
(With inputs from Reuters)