Paytm IPO: Paytm’s parent One97 Communications is all set to come out with an initial public offer (IPO) on November 8. The proposed Rs 18,300-crore IPO will make it one of India’s 50 most valuable companies. Paytm IPO is India’s largest so far, surpassing Coal India’s public issue at Rs 15,745 crore that was raised in October 2010.
Note that according to a report by Redseer management consulting company, Paytm is currently India’s leading digital ecosystem for consumers and merchants, with over 3.37 crore registered consumers and over 2.18 crore registered merchants as of June 30, 2021.
At the upper end of the price band of Rs 2,150 apiece, Paytm will have a post-money valuation of Rs 1,39,378.84 crore, which will propel it to the 36th position in terms of market capitalization among listed companies. Paytm’s market cap will be more than some of the established companies such as Hindustan Zinc, NTPC, Divi’s Laboratories, Power Grid Corp., Indian Oil Corp. (IOC), Vedanta, Pidilite Industries, SBI Life Insurance, Grasim Industries, Bajaj Auto, L&T Infotech, Mahindra & Mahindra (M&M), Hindalco Industries, Coal India, Zomato, SBI Cards and DLF Ltd.
Paytm IPO details:
Paytm IPO opening date: The current Rs 18,300-crore IPO will be open for subscription next month on November 8. The subscription will close on November 10.
Paytm IPO price band: One97 Communications has fixed the price band for the IPO at Rs 2,080-2,150 per share. The three-day public share sale will comprise a fresh issue of Rs 8,300 crore and an offer for sale of Rs 10,000 crore. In the present issue, the company has announced that 75% will be reserved for Qualified Institutional Buyers (QIBs), 15% for non-institutional investors (NIIs) and the remaining 10% for retail investors.
The OFS consists sale of up to Rs 402.65 crore by Vijay Shekhar Sharma, up to Rs 4,704.43 crore by Antfin (Netherlands) Holdings, up to Rs 784.82 crore by Alibaba.com Singapore E-Commerce and up to Rs 75.02 crore by Elevation CapitalV FII Holdings.
Further, Elevation Capital V Ltd will offer up to Rs 64.01 crore, Saif III Mauritius Rs 1,327.65 crore, Saif Partners Rs 563.63 crore, SVF Partners Rs 1,689.03 crore and International Holdings Rs 301.77 crore, as per the IPO document.
Paytm IPO apply: Investors who wish to subscribe to Paytm’s IPO can bid in the lot of six equity shares and multiples thereof. At the upper price band, they will have to shell out Rs 12,900 to get a single lot of One 97 Communications. The shares will be listed on both BSE and NSE.
For the unversed, Morgan Stanley India Company, Goldman Sachs (India) Securities, Axis Capital, ICICI Securities, J.P. Morgan India, Citigroup Global Markets India and HDFC Bank are the book running lead managers to the IPO. Link Intime India is the registrar of the issue.
The proceeds from the fresh issue will be used towards (1) Growing and strengthening our Paytm ecosystem, including through acquisition of consumers and merchants and providing them with greater access to technology and financial services, (2) Investing in new business initiatives, acquisitions and strategic partnerships and, (3) For general corporate purposes, according to the information in the RHP.
Out of the total proceeds of the IPO, Rs 4,300 crore will be used to grow and strengthen Paytm’s ecosystem; it will offer easy access to technology and financial services to acquire new clients and business partners, and retain existing customers and merchants.
Paytm Financials:
Paytm’s losses narrowed in June on the back of lower marketing expenses and payment processing charges. It clocked sales of Rs 3,186.80 crore in June compared to Rs 3,540.70 crore in June 2020. Net losses narrowed to Rs 1,701 crore from Rs 2,942.4 crore in the period under consideration. Total borrowings stood at Rs 476 crore in June compared to Rs 544.90 crore in June 2020.
It is worth adding that the anchor portion of the issue is likely to open on November 3, 2021. The share allotment is likely to take place on November 15, 2021, and the shares are expected to be listed on the bourses on November 18, 2021.