SoftBank returns to black in September quarter, helped by Indian IPO spree: Report

Japan's investment major SoftBank Group Corp has swung to its biggest quarterly profit in two years, thanks to a strong influx of IPOs in the Indian markets, reported Reuters. The ongoing euphoria in the Indian primary market has given its founder Masayoshi Son more ammunition for his next bet, it said.

The Tokyo-based investment giant reported a net income of 1.18 trillion yen ($7.7 billion) for the September quarter, a stark turnaround from last year’s net loss of 931 billion yen. Analysts had forecasted an average net income of around 295 billion yen for this period. The tech conglomerate’s gains were driven by rising share prices of publicly listed Indian companies within its Vision Fund investment vehicles.

The results indicate that SoftBank's more cautious investment strategy is starting to pay off. Masayoshi Son's investment powerhouse had to scale back for an extended period when interest rate hikes drove down the value of its high-growth tech start-up holdings.

Some of these valuations are starting to rebound, helping the Vision Fund unit achieve an investment gain of 608 billion yen. The unit has reported profits in four of the last five quarters. A recovery of the yen against the dollar over the quarter generated a gain of 289 billion yen as dollar-denominated liabilities could be funded more readily in yen.

"After we were making large losses in the Vision Funds, we were very conservative. So now we were able to generate good profits as a result of learning from that," SoftBank Chief Financial Officer Yoshimitsu Goto said after the earnings release.

"Our investment gains were very strong this quarter," Goto said, adding he has high hopes for companies in its investment portfolio that are at the late stages ready for public listings.

The two Vision funds fully or partially exited investments to the tune of $1.85 billion. It made full exits from 10 portfolio companies including Chinese artificial intelligence firm SenseTime and India's payment firm Paytm.