Paytm, the Indian digital payments pioneer backed by Ant Group and Softbank is seeking regulatory approval to raise up to Rs. 16,600 crores (US$2.23 billion) in one of the country’s largest stock market debuts.
One97 Communications Ltd, Paytm’s parent company filed papers with SEBI to raise Rs. 16,600 crores through means of IPO.
The IPO values the company at up to $25 billion, according to sources, and comes at a time when India’s digital economy is seeing a pandemic-fueled boom, as well as a rising battle for market domination with Alphabet’s Google Pay and Facebook’s WhatsApp Pay.
According to a regulatory filing by the domestic fintech firm on Friday, the company, formerly known as One97 Communications Ltd, would sell new shares worth 83 billion rupees in the offering, while current investors will sell another 83 billion rupees in equity.
“Companies in the digital realm have good development potential because of the increase in the number of internet users and widespread access among the youth,” says Ajit Mishra, vice president of research at Religare Broking in Noida.
Paytm’s IPO, which has Berkshire Hathaway Inc (BRKa.N) as a sponsor, is likely to kick off a wave of IPOs by local fintech firms aiming to tap capital markets for development plans.
The startup, founded by entrepreneur Vijay Shekhar Sharma, 43, came to prominence in 2016 due to India’s surprise ban on high-value currency banknotes, which resulted in a surge in digital payments. It helped Paytm expand its services to include insurance and gold sales, movie and plane tickets, and bank deposits and remittances.
Paytm has stated that the proceeds from the IPO will be used to expand its payment network and make acquisitions.
Several Indian firms have announced ambitions to go public to take advantage of rising global investor interest.
A blockbuster IPO by Walmart Inc-owned e-commerce juggernaut Flipkart, beauty brand Nykaa and ride-hailing firm Ola are among the others in the works.
According to the prospectus, One97’s consolidated net loss for the fiscal year ended March fell to 16.96 billion rupees from 28.42 billion rupees the previous year. The revenue dropped by 14.6% to 28.02 billion rupees.
One97 indicated before the IPO that it may consider offering more shares for up to 20 billion Indian rupees.
