Paytm IPO to be worth Rs 16,600 crore, This will be the biggest IPO ever. The company file its Draft Red Herring Prospectus to SEBI for this.
The country’s largest digital payments provider Paytm has sent an application to market regulator SEBI for an IPO worth Rs 16,600 crore. There will be fresh shares worth Rs 8,300 crore, while shares worth Rs 8,300 crore will be sold through OFS. This will be the biggest IPO ever. The biggest IPO ever in the country was of Coal India Limited. In 2010, the company had raised more than Rs 15,000 crore through this.
Among the stakeholders of Paytm is Ant Group of China’s Alibaba. It holds the highest 29.71 per cent stake in the company. At number two is SoftBank Vision Fund with 19.63 per cent stake. SAIF Partners holds 18.56 per cent stake. The promoter of the company, Vijay Shekhar Sharma, holds 14.67 per cent stake.
Paytm is currently India’s second most-valuable Internet company, last valued at $16 billion when it raised a billion dollars in November 2019 led by T Rowe Price, Discovery Capital and D1 Capital.
Besides these investors, the key stakeholders of the company include names like Ant Financial Netherlands, Alibaba Singapore, three funds of Elevation Capital, SoftBank Vision Fund and BH International Holdings.
It is believed that the company’s IPO can come around Diwali. Berkshire Hathaway Inc., China’s Ant Group and Japan’s SoftBank have investments in Paytm. This Noida-based company is owned by One97 Communications Ltd. The company says that it will use the proceeds of the IPO to strengthen its payments ecosystem and to fund new business initiatives and acquisitions. JPMorgan Chase, Morgan Stanley, ICICI Securities, Goldman Sachs, Axis Capital, Citi and HDFC Bank have been made booking running managers for this IPO.
According to the DRHP filed with SEBI, 75 per cent of the IPO has been reserved for Qualified Institutional Buyers (QIBs). The company can allot up to 60 per cent of the QIB portion to anchor investors. 15 per cent of the issue will be for non-institution investors (NIIs) and 10 per cent for retail investors. The company has also reserved some part for the employees but its information has not been given in DRHP.
Paytm Founder and CEO Vijay Shekhar Sharma has been engaged in increasing revenue and monetizing Paytm’s services for the past one year. The startup has expanded its business beyond digital payments into banking, credit cards, financial services, wealth management and digital wallets. Paytm has successfully faced the challenge of PhonePe, Google Pay, Amazon Pay and WhatsApp Pay.
According to the Bernstein report released on May 27, Paytm’s revenue will double to Rs 7000 crore by the fiscal year 2023. Then the share of non-payment segment in its total business would be close to 33 per cent.
It was also said in this report that Paytm is trying to reduce expenses so that the company comes to break even (no profit no loss) in the next 12-18 months.