Before IPO Launch, PayTm Reports Big Drop In Revenues, Losses Due To This Reason

According to the annual report of the One97 Communications Ltd sent to shareholders on Saturday, the IPO-bound owner of PayTm saw a dip of 11% from ?3540.77 crore in FY’20 to ?3186.8 crore for fiscal year 2020 -2021 (FY’21) in its consolidated revenues.

Big Drop In Revenue, Losses

On a consolidated basis, alongwith the dip in revenues, the company also cut losses by 42% to ?1701 crore in the fiscal ending March 2021 (FY’21). For previous year, company cut losses by 30% to ?2942.3 crore.

This drop in losses is driven by shrinking expenses. From ?6,138.23 crore in FY’20, total burn of PayTm reduced by 22% to ?4,783 crore in FY’21.

Paytm spokesperson said that due to strong recovery in the second half of the year, the company observed a minimal impact on revenues despite the pandemic and its disruption in the business of their merchant partners.

During the listing, the losses of the organization continue to be a matter of concern, as the organization keeps reducing the burn.

With profitability in sight, the company could potentially look to break even in 2021 said Paytm founder Vijay Shekhar Sharma in January.

About The IPO

The company is gearing up for its public debut by November-end 2021. It is expected that the company is expected to file its draft red herring prospectus (DRHP) by July, and conduct investor roadshows by August for its pre-IPO fundraise.

Reportedly during its initial public offering (IPO) worth at least $3 billion, as a part of the primary share sale, the company was looking to raise $1billion-$1.5 billion.

As per norms of the Securities and Exchange Board of India (Sebi), the company shall raise primary funds from a fresh issue of shares to qualified institutional buyers (QIB).

The company, in order to kickstart the IPO process, is in the final stages to appoint bankers and is in talks with Axis Capital, ICICI Securities, and SBI Capital Markets, along with JP Morgan, CitiGroup and Morgan Stanley.

As they look to offer a portion of their stake to retail investors, the IPO will also give a liquidity event for long-term shareholders.

Currently, Alibaba Group Holding Ltd and its payment arm ANT Financial hold about 37% of the major payments, while Softbank through its Softbank Vision Fund and Elevation Capital (formerly SAIF Partners) hold about 20% each in this organization. The stake of founder Vijay Shekhar Sharma stands at 14.67% in the company.

One97 currently has movie and business ticketing businesses; its asset management platform, Paytm Money; its online payment gateway business, Paytm Payment Gateway, and its offline trading business.

There is also a business that inserts a bakery and credit company and other subsidiary companies.

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