In what could be the largest debut ever this year, India’s leading digital payments provider Paytm is aiming to raise about ?21800 crore in an initial public offering.
India’s Biggest Ever IPO
The person under the condition of anonymity said that there are plans by investors like Berkshire Hathaway Inc., SoftBank Group Corp. and Ant Group Co. to invest in India, the timing of which shall coincide with Diwali festival season. Formally known as One97 Communications Ltd., Paytm is targeting a valuation of around $25 billion to $30 billion.
Paytm has declined to comment upon the meeting that the board of One97 has planned in order to formally approve the IPO. Previously, the country’s largest IPO so far has been that of Coal India Ltd which would raise more than ?15,000 in 2010, and if Paytm’s goes well then it is cited to surpass Coal India.
With Morgan Stanley as a leading contender, other banks shortlisted to run the Paytm offering include Morgan Stanley, Citigroup Inc. and JPMorgan Chase & Co. The process is expected to get rolled late in month of June or early July.
In order to meet the regulatory obligations in India, a mix of new and existing shares shall be included in the public market debut.
It is required that 10% of shares are floated within two years and 25% within five years as per the regulations of the country.
Expanded Beyond Digital Payments
Paytm is led by Vijay Shekhar Sharma and they are focusing on ramping up revenue and monetizing its services over the past year. It has gone beyond the digital payments and expanded into banking, credit cards, financial services, wealth management and digital wallets. The Unified Payments Interface or UPI, which is India’s financial payments backbone.
It has the biggest market share in India as far as merchant payments is concerned. Despite facing stiff competition from a swath of global players including Walmart Inc.-owned PhonePe, Google Pay, Amazon Pay as well as Facebook Inc.-owned WhatsApp Pay, paytm has stood its ground.
According to the numbers, Paytm has over 20 million merchant partners and its users make 1.4 billion monthly transactions.
After pandemic-related spending spurred digital payments, CEO Sharma said Paytm had its best ever quarter in the first three months of this year.
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