India’s leading digital payment platform Paytm, has finally received the green signal from market regulator SEBI to float its initial public offering worth Rs. 16,600 crores. If Paytm manages to raise its IPO target, it will overtake Coal India‘s IPO in 2013 where the government entity raised over Rs. 15,000 crores.
SEBI cleared the IPO launch on Friday, making it possible for the fintech company to float its public offering before Diwali. As per sources close to the internal developments, Paytm would shelve its plan of pre-IPO share sale to fast-track its IPO process.
Let’s find out more about this.
International Firms Interested in Paytm IPO
A long list of global firms has already shown interest in the initial public offering of Paytm. Fund managers Goldman Sachs and Morgan Stanley, asset management firm Alkeon Capital, Canada-based CPPIB are interested in Paytm IPO. These investors are a new addition to the list of bidders who have been in talks to invest in both anchor investment and IPO. Paytm would be directly going for its IPO without a pre-IPO share sale.
Paytm was valued at nearly $16 billion while it raised funds almost 2 years ago. However, as per sources, it is looking for a valuation of around $20-$22 billion in its public offering. The digital payment platform comes with a series of top investors like SoftBank Vision Fund, Elevation Capital, Alibaba, Ant Group and more.
Some of the global investors have signalled their interest in a higher valuation. However, Paytm has indicated that it can reach a valuation anywhere between $20 billion and $22 billion.
A Detailed Look at Paytm IPO
Paytm’s initial public offering is set to be a combination of both offer for sale (OFS) and the issuance of fresh shares in equal parts. In other words, it would consist of an OFS of shares worth Rs. 8,300 crores by the existing shareholders. The IPO will also consist of fresh issues of Rs. 8,300.
Although a clear timeline has not been provided by the company, it aims to launch the IPO either before or immediately after Diwali.
So, how exactly does Paytm intend to utilise the fund raised through its IPO?
As per its DRHP, Paytm is going to use Rs. 4,300 crores of the total funds to expand its business line and bring in new customers and merchants. In addition, it intends to meet general corporate expenses and invest in new partnerships or explore acquisition opportunities to grow its business.
An Overview of Company Financials
Before subscribing to the public offering of a company, individuals need to check out the financial information to have a clear idea about the company’s performance. This tabular representation provides a detailed picture of Paytm’s financials:
|FY Ending on||31 March 2019||31 March 2020||31 March 2021|
|Total Assets||Rs. 87,668 million||Rs. 103,031 million||Rs. 91,513 million|
|Total Revenue||Rs. 35,797 million||Rs. 35,407 million||Rs. 31,868 million|
|Profit after Tax||Rs. 42,309 million||Rs. 29,424 million||Rs. 17,010 million|
With SEBI approval, Paytm joins the long list of Indian tech firms that have been either listed on the stock exchange or initiated proceedings for the same. Paytm IPO has generated much hype in the Indian stock market space due to its massive IPO size and its stature in the Indian fintech sector.
Frequently Asked Questions
- What is the face value of Paytm equity shares?
The face value of Paytm equity shares is Re. 1 per share.
- Who are the lead managers of this IPO?
The lead managers of Paytm IPO include Goldman Sachs (India) Securities India Limited, ICICI Securities, HDFC Bank, J.P. Morgan India Private Limited, Axis Capital, Morgan Stanley India, and Citigroup Global Markets India Private Ltd.
- When is the opening date of Paytm IPO?
The opening date is not yet finalised.