India's IPO boom helps Vision Fund turn losses into profits. SoftBank's Q2 net profit reaches $7.7 billion, exceeding expectations.

SoftBank Group (SFTBY.US) has seen a series of successful listings in the Indian market driving its largest quarterly profit in two years, providing more funds for its founder Masayoshi Son's new round of investments. The Tokyo-based company reported a net profit of 1.18 trillion yen (about $7.7 billion) in the second quarter, a huge reversal from the net loss of 931 billion yen in the same period last year, far exceeding the analysts' average expectation of 295 billion yen in net profit. The Vision Fund's income reached 373 billion yen, benefiting from the rise in value of companies like DiDi Global Inc (DIDIY.US) and Coupang (CPNG.US). The thriving IPO market in India has brought hope for the Vision Fund, which has struggled to achieve returns commensurate with its size of over $100 billion for many years. Since its investment department was established, it has profited greatly from the debut of startups like Ola Electric Mobility Ltd. and Brainbees Solutions Ltd. The SoftBank-backed food delivery app Swiggy Ltd.'s upcoming $1.3 billion IPO, oversubscribed by more than three times, further confirms SoftBank's "harvest season" in India. Despite consecutive massive losses for two years and investments in hundreds of loss-making startups, SoftBank and the Vision Fund have adopted a more targeted investment approach, focusing on generative artificial intelligence, with recent investments in companies like OpenAI and Perplexity AI Inc. Astris Advisory analyst Kirk Boodry pointed out that about half of the second-quarter earnings came from the upside potential brought by Indian IPOs, with a potential slight boom if the US IPO channel reopens, but their plans in artificial intelligence may be more important. Masayoshi Son is preparing to heavily invest in the artificial intelligence and semiconductor sectors, with SoftBank accumulating a huge cash reserve, and the value of its assets excluding debt has risen along with the stock price of chip subsidiary Arm Holdings (ARM.US). Although SoftBank's stock price fluctuates as investors' attitudes towards whether artificial intelligence can effectively improve people's lives change. The stock hit a record high in July but has since recovered. It is worth mentioning that due to interest rate hikes, the value of high-growth tech startups held by SoftBank has significantly declined, forcing Masayoshi Son's investment business into a long period of tightening. Now, with some valuations starting to recover, the investment income for the Vision Fund department has reached 608 billion yen. In the past five quarters, the department has seen profits in four quarters. However, despite a total gain of $22.6 billion since the inception of the Vision Fund 1, this gain has largely been offset by the $21 billion loss from Vision Fund 2. This quarter, the yen rose against the dollar, bringing in a profit of 289 billion yen, as dollar-denominated debt can be more easily financed in yen.