Paytm files for Rs 16,600 crore IPO
Paytm is India’s leading digital ecosystem for consumers and merchants, with a strong presence on both sides of the spectrum
One97 Communications, the parent company of Paytm, has filed its draft red herring prospectus (DRHP) with the regulator for an aggregate offer size of Rs 16,600 crore via an Initial Public Offering (IPO), the company said in a statement.
The issue comprises a fresh issue of equity shares of the face value of Re 1 each aggregating to Rs 8,300 crore and offers for sale by the existing shareholders, aggregating to Rs 8,300 crore. The company also retains the option, in discussion with BRLMs, to undertake a pre-IPO placement of Rs 2,000 crore, subject to relevant approvals. If the pre-IPO placement is completed, the fresh issue size will be reduced to that extent.
The IPO is being made under rule 19(2)b of the Securities Contracts (Regulation) Rules, 1957, as amended, (the “SCRR”) and Regulation 31 of the SEBI ICDR Regulations where allocation to QIBs is 75 per cent, NIIs is 15 per cent and RIBs is 10 per cent.
Paytm is India’s leading digital ecosystem for consumers and merchants, with a strong presence on both sides of the spectrum. The company’s two-sided (consumer and merchant) ecosystem enables commerce, and provides access to financial services, by leveraging technology to improve the lives of consumers and helps merchants grow their businesses.
Paytm financial services businesses — mobile banking, lending, insurance, wealth management services — were launched recently between 2019 and 2021. The company has also expanded into cloud and commercial services. These services are growing rapidly and creating an impact in their sectors.
As of FY21, its revenue from operations stood at Rs 2,800 crore from 114 million annual transacting users and had facilitated 7.4 billion transactions including transactions made to merchants via its ecosystem and peer-to-peer payments.
Paytm is already contribution margin positive as stated in the DRHP, and despite it being a COVID-19 impacted year, the company’s revenue from payments and financial services increased in FY 2021 as compared to FY 2020.
In 2017, One97 Communications piloted its bill payment services in Canada and in 2018, it partnered with Softbank Corp., Softbank Group Corp. and Yahoo Japan Corporation to launch PayPay, a leading digital payments and financial services company in Japan. It continues to explore sure international opportunities, especially in developed markets.
Lead managers appointed to the Issue are Morgan Stanley India Company Private Limited, Goldman Sachs (India) Securities Private Limited, ICICI Securities Limited, Axis Capital Limited, JP Morgan India Private Limited, Citigroup Global Markets India Private Ltd and HDFC Bank Limited.