One 97 Communications Ltd IPO Review 2021: Paytm’s parent company One97 Communications IPO will hit the markets next week. The IPO is sized at $2.4 billion(Rs.18,300 crores) and will be the biggest IPO to ever hit the markets. The closest in comparison is the Coal India IPO sized $2.03 billion( Rs. 15,300 crores).
In this article, we look into important information on the Paytm IPO. We also will find out the possible prospects of the company. Keep reading to find out!
Table of Contents
About the Company
Founded in 2010, the company has grown in leaps and bounds to become one of the biggest companies in India’s digital ecosystem. The company was founded by Vijay Shekar Sharma with an initial capital of $2 million. Today the company is raising over $2 billion.
The company has initially started by providing users with a mode to recharge their phones through their website. Over the years the company spread out to accommodate other payments as well. These included DTH and landline payments.
Over the years the company created its famed Paytmwallet and allowed users to book train tickets. But one of the biggest spurts for growth it received was post Demonetization. This was when only a fragment of the population used online payments. This was further aided by the introduction of Jio.
Despite having a stronghold in the markets and being an early entrant Paytm’s growth was short-lived post the demonetisation period. This was thanks to UPI being introduced. Paytm initially refused to integrate UPI as a mode of payment on its app. This made it lose out to other apps like Google Pay and PhonePe.
Despite this setback Paytm today has a customer base of 333 million customers and 114 million annual transacting users. In addition to this, the company has over 21 million users. The company is currently valuation in the IPO is from $19.5 billion to $20 billion.
Grey Market Premium
The shares of One97 Communications traded at a 6.27% premium in the grey market before the IPO. The shares are traded at a price of Rs.2285. This gives it a premium of Rs 135 over the issue price band of Rs 2080-2150 per share.
Key IPO Information
Paytm does not have any promoters as it is a professionally managed company. The company has appointed Axis Capital Ltd., Citigroup Global Markets India Pvt Ltd, Goldman Sachs (India) Securities Pvt Ltd, HDFC Bank Ltd, ICICI Securities Ltd, J.P. Morgan India Pvt. Ltd, Morgan Stanley India Company Pvt Ltd, Link Intime India Pvt Ltd has been appointed as the registrar to the issue.
Particulars | Details |
|---|---|
| IPO Size | ₹18,300.00 Cr |
| Fresh Issue | ₹8,300.00 Cr |
| Offer For Sale(OFS) | ₹10,000.00 Cr |
| Opening Date | Nov 8, 2021 |
| Closing Date | Nov 10, 2021 |
| Face Value | ₹1 per equity share |
| Price Band | ₹2080 to ₹2150 |
| Lot Size | 6 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 15 |
| Listing Date | Nov 18, 2021 |
Purpose of the IPO
The raised from the IPO will be used for the following purposes:
- Rs. 4,300 crores will be used for growing and strengthening the Paytm ecosystem. This includes the acquisition and retention of consumers and merchants.
- Rs. 2,000 crores for investing in new business initiatives, acquisitions and strategic partnerships.
- General Corporate Purposes.
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In Closing
In this post, we covered the One97 Communications Ltd IPO Review 2021. The Initial Public Offering opens on November 8th and closes on November 10th.
For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of the company.
Do let us know what you think of the One 97 Communications Ltd IPO review 2021. Are you planning to apply for this IPO or not? Comment below. Cheers!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
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