Paytm is able to begin India’s largest Initial Public Offering (IPO), breaking Coal India’s previous best of Rs 15,000 crore generated over a couple of decades ago. Paytm is expected to raise Rs 16,600 crore following gaining approval from marketplace regulator SEBI, according to reports.
If completed, the anticipated IPO would have been the biggest of its kind. The Rs 15,200-crore public offering (IPO) of Indian Oil in 2010 was the nation’s biggest to history.
Paytm is valued at between Rs 1.47 and Rs 1.78 lakh crores.
The firm’s unregistered stocks have been assessed at Rs 2,950 each by US-based evaluation specialist Aswath Damodaran, a finance professor at New York University’s Stern School of Business.According to a source, Alibaba group firm Antfin (Netherlands) Holding BV is anticipated to purchase at least 5% of it’s own stock to reduce its holdings below 25% in order to meet regulatory standards.
According to the records, Antfin (Netherlands) Holding BV (with a 29.6 percent ownership), Alibaba.com Singapore E-Commerce (7.2 percent), and Altitude Capital V FII Investments are among the shareholders relinquishing their stakes (0.7 percent).
Altitude Finance V (which owns 0.6 percent of the company), SAIF III Mauritius Business (12.1%), SAIF Partners Indian IV (5.1%), SVF Panther (Cayman) (1.3%), and BH International Holdings (2.8%) would also sell their property.
The business plans to invest Rs 4,300 crores in expanding and enhancing the Paytm environment, particularly by acquiring customers and businesses and giving consumers better access to information and banking sectors.Paytm intends to set aside Rs 2,000 crores for corporate strategy, mergers, and partnership opportunities, as well as up to 25% of the overall funds received via the IPO for corporate business reasons.
Paytm’s merchants baseline to 2.11 crores on March 31, 2021, up over 1.12 crores in March 2019, and retail volume value roughly doubled to over Rs 4 lakh crores in the financial year (FY) from Rs 2.29 lakh crores in FY 2019.The industry’s deficit shrank to Rs 1,704 crores in FY21, down from Rs 2,943.3 crore in FY20 and Rs 4,235.5 crores in FY19.
In FY21, overall revenue fell to Rs 3,186.8 crores, down from Rs 3,540.7 crores in FY20.Paytm had a negative income of Rs 222.1 crores in FY21, owing to financial liabilities and the need for extra capital investments.
The Sebi’s permission for such Paytm IPO happened at a time when a slew of new-age online companies will either have registered or are in the process of doing just that. In July, Zomato Ltd. decided to go public on the BSE and the National Stock Exchange, while Freshworks Inc., a company with Indian roots, went public on the Nasdaq. Nykaa will have to go public on October 28, and PolicyBazaar, MobiKwik, Pine Labs, and Delhivery are all planning IPOs.
Paytm, India’s largest financial services company, have introduced a multi transaction infrastructure to generate money.
Its retailer ’s baseline to 2.11 crore since about March 31, 2021, up from 1.12 crore in March 2019, and retail volume value (GMV) roughly tripled to over Rs 4 lakh crore inside the financial year (FY) from Rs 2.29 lakh crore the previous season.
The industry’s deficit shrank to Rs 1,704 crore in FY21, down against Rs 2,943.3 crore in FY20 as well as Rs 4,235.5 crore in FY19. In FY21, overall sales fell to Rs 3,186.8 crore, down against Rs 3,540.7 crore in FY20. Due to high operating inefficiencies and higher working capital needs, Paytm generated a cash flow problem of Rs 222.1 crore in FY21.
Paytm receives nod for Rs 16,600 Crore IPO
SEBI reportedly given Paytm the go light to undertake India’s largest IPO, as according sources quoted by PTI on Friday. In order to expedite the offering process, the business plans to bypass the pre-IPO shares offering rounds. “Sebi has approved the Paytm IPO,” a sources have told PTI. Paytm is hoping to raise Rs 1.47-1.78 lakh crore in its first public offering. Paytm’s unregistered shares were assessed at Rs 2,950 per piece by Aswath Damodaran, with The US valuations specialist.
Paytm IPO Details
SEBI approved One97 Telecommunications, Paytm’s holding firm, for its Rs 16,600 crore initial public offering. According the Draft Red Herring Prospectus (DRHP), primary share purchases would collect Rs 8,300 crore, with the remaining cash coming from such a sale of shares (OFS). During the OFS round, shareholders would have the option to market existing interests.
JPMorgan Chase, Morgan Stanley, ICICI Securities, Goldman Sachs, Axis Capital, Citi, and HDFC Bank are indeed the manuscript administrators for the Paytm IPO, according to the draught. Following filing its draught in July, the company is planning to market in mid-November.
Who Are the Investors in Paytm?
Shareholders ANT, Tencent, Softbank, and Elevation Investment were going to sell stocks through to the OFS, according with DRHP. Nevertheless, among some of the purchasing stockholders include Berkshire Hathaway and Ratan Tata’s RNT Partnership. It’s worth noting, though, that now the draught doesn’t reveal what proportion of the particular value is now being transferred by either of the industry’s stockholders.
According to the DRHP, “The red herring prospectus and the prospectus will determine the ultimate price at which equity shares will be allocated to ASBA Bidders. Anchor investor would receive shareholdings there at anchoring investor initial offer, which will then be determined by the Board or IPO Committee, as appropriate, in collaboration with the JGC-BRLMs and BRLMs, in accordance with both the red herring prospectus and prospectus.”
Paytm Likely to Go Public Post Diwali
Paytm is set to issue its securities here on BSE and NSE by mid-November, according to Indian Express. The IPO is expected to fetch a capitalization of between Rs 150,00 crore and Rs 165,000 crore for the corporation. The firm’s unregistered stocks have been assessed at Rs 2,950 each by US-based evaluation specialist Aswath Damodaran, a finance professor at New York University’s Stern School of Business.
Coal India having previously acquired the largest IPO, for Rs 15,500 crore, within last quarter of 2010, when it was launched a decade earlier.