Paytm in Talks with ADIA, BlackRock for Blockbuster IPO

Digital payment platform Paytm is in touch with various global financial firms and asset managers ahead of its initial public offering. According to sources close to the matter, Japanese group Nomura, US-based asset management company BlackRock and Abu Dhabi Investment Authority (ADIA) are in talks with Paytm for investment in the IPO.

Paytm has been conducting investor roadshows to convince firms to become anchor investors. Singapore GIC Pte is among the list of potential bidders intending to participate in the recent IPO. Paytm will be conducting its public offering in November after it receives SEBI’s nod.

A Brief Insight into Paytm IPO

One97 Communications Ltd, which is popularly known as Paytm, has submitted draft papers for its initial public offering in July this year. As per its draft prospectus, Paytm would be opting for a public offering worth Rs. 16,600 crores.

Paytm IPO would consist of a combination of an offer for sale (OFS) by existing shareholders worth Rs. 8,300 crores and the issue of fresh shares worth another Rs. 8,300 crores.

The company is planning to use the proceeds raised from its initial public offering for the following purposes:

• To meet general corporate expenditures for investing in new business initiatives, partnerships, and acquisitions to allow further expansion of services.
• Boosting Paytm’s ecosystem by increasing customer acquisition and retention.

Paytm is reportedly planning to increase its IPO size on the basis of investor feedback. There are already enough bids that can cover the allocated shares for anchor investment in its IPO.

About the Company

One97 Communications Ltd. is one of the leading digital platforms for both consumers and merchants. Founded in 2000, the company now has a giant customer base of over 333 million, along with more than 21 million registered merchants. It specialises in offering cloud services, financial services, payment services, and more.

It launched its first mobile payment platform in 2009, named Paytm, which offers cashless payment options to customers. The company comes with a wide range of digital payment services such as cashless payment at stores, mobile recharge, bill payment, fund transfer, ticket booking, investments, purchasing insurances, and much more.

As per a report by Kantar BrandZ India in 2020, Paytm has become the largest online payment platform in India, with a massive valuation of $6.3 billion. It allows merchants and businesses a platform for advertising products and services. According to a recent post by the company, Paytm customers use the platform to make more than 1.4 billion transactions every month.

Bottom Line

Although there are 4 potential bidders as of now, sources suggest this number can go up in the future. Paytm is holding talks and negotiations with the aim to rope in more investors right before the public offering.

Paytm comes with the biggest share of merchant payments in India and has successfully handled rising competition in the digital payment space.

Investors are already quite enthusiastic about Paytm’s blockbuster IPO. To receive regular updates about IPOs, stock market, and investment, make sure to follow Angel One blogs.

Frequently Asked Questions

1. Where will Paytm IPO be listed?

Paytm IPO will be listed on both the BSE and NSE.

2. Who are the lead managers of Paytm IPO?

The following firms will hold the responsibility of being the lead managers for this IPO:

• HDFC Bank Limited
• JP Morgan India Private Ltd.
• ICICI Securities Ltd.
• Axis Capital Ltd.
• Goldman Sachs India Securities Pvt. Ltd.
• Morgan Stanley India Private Ltd.
• Citigroup Global Markets India Ltd.

3. What would be Paytm’s valuation post its IPO?

Paytm is seeking to have a valuation of around $20- $22 billion after its initial public offering.