Its draft papers say it plans to raise an IPO of USD 2.2 billion
By Aiden Jewelle Gonzales
Paytm, a FinTech company and India’s biggest digital payments provider, will go public later this year to the tune of USD 2.2 billion or INR 16,600 crore for its Initial Public Offering (IPO). This would make it the largest ever IPO in India, half of which the company will raise as fresh funds by offering new shares (valued at USD 1.1 billion).
About 36 percent of Paytm, which stands for ‘pay through mobile’ and was founded by Vijay Shekhar Sharma in 2010, is owned by Chinese tech giants Ant Group and Alibaba Group, and the company is currently valued at USD 16 billion, making it one of India’s most valuable start-ups.
Paytm had reportedly filed its Draft Red Herring Prospectus (DRHP), a preliminary registration document for companies looking to go public on the stock exchange, on 16 July. The DRHP is currently under review by the Securities and Exchange Board of India (SEBI), which will take between 2-3 months, but sources have already stated that the company is hoping for a valuation between USD 25 billion and USD 30 billion, which, if successful, will make it one of the top 10 most valued financial firms in India.
The DRHP, however, did not include the number or prices of shares being offered, nor did it say when exactly the IPO would be launched, which is standard practice at this time. This comes on the heels of other big companies filing for IPOs in India, an exciting time for the digital and financial sphere, which has continued to make strides despite the COVID-19 pandemic. Food delivery company Zomato, for example, recently became India’s first ever unicorn IPO, raising USD 1.3 billion this week, and many consider it a good sign for other Indian startups wishing to go public within the year.
Paytm hopes to capitalise on investors’ confidence in the growth potential of the industry, despite filing a USD 233.6 million loss in 2020. Its over 350 million-strong user base for its easy-to-use payments gateway that includes ticket booking, e-commerce exchanges, insurance, and digital gold puts it in a strong position moving forward. Founder Vijay described Paytm as a “payments-led superapp, through which we offer our consumers innovative and intuitive digital products and services.”
If all goes according to plan with the share sale, which will be handled by Morgan Stanley, Goldman Sachs, Axis Capital, ICICI Securities, JP Morgan and Citigroup, Paytm hopes to invest over USD 260,000 in acquisitions and other business initiatives and partnerships.