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PayMate India files for IPO to raise Rs 1500 cr
Photo Credit: 123RF.com

Visa and Lightbox-backed PayMate India, a B2B payments and services provider will look to raise Rs 1,500 crore through an initial public offering (IPO), the company said in its Draft Red Herring Prospectus filed with The Securities and Exchange Board of India (Sebi). 

According to the DRHP, The IPO will include a fresh issue of Rs 1,125 crore and an offer for sale (OFS) of Rs 375 crore.

Additionally, the company, in consultation with the lead bankers to the issue may consider a private placement of equity shares aggregating up to Rs 225 crore. If such placement is completed, the fresh issue size will be reduced.

Its promoters and investors including US venture capital fund Lightbox Ventures, UK investment and corporate advisory group, Mayfair 101, Tokyo-headquartered RSP India Fund and IPO Wealth Holdings will be divesting their stakes in the OFS. 

Part of the promoter shareholding, founder and the largest stakeholder Ajay Adiseshan will sell shares worth up to Rs 134.73 crore while the company’s CFO Vishvanathan Subramanian will divest shares worth up to Rs 3.29 crore.  

Both collectively own 29.59% in the company with Ajay holding the majority at 28.89% in PayMate.  

Among the promoter group shareholders, G. Adiseshan, Uma Vishvanathan, Dhruv Pratap Singh, Probir Kumar Roy, Alexander Kuruvilla and Anand Rajaram will be selling their stake in the IPO. 

As part of the OFS, Lightbox Ventures - holding 27.3% stake in the company and the largest institutional shareholder - will sell up to Rs 127.38 crore. Mayfield FVCI Ltd will exit up to Rs 15.66 crore ownership. RSP India Fund will divest up to Rs 2.74 crore and IPO Wealth Holdings Pvt. Ltd will be selling up to Rs 17.01 crore worth of shares in PayMate. 

The firm’s other investors include Times Group parent Brand Capital, the strategic investment arm of Bennett, Coleman & Co. Ltd, American venture capital funds Kleiner Perkins, formerly Kleiner Perkins Caufield & Byers and Sherpalo Ventures.

The proceeds from the issue worth Rs 77 crore will be used for investment for expanding its business into new geographies, Rs 228 crore will be used for pursuing inorganic initiatives and Rs 689 crore will be used for placing cash as collateral with its financial institution partners to improve its margins.

The public issue, that includes a reservation for subscription by eligible employees, will offer not less than 75% allocation to Qualified Institutional Buyers (QIBs), 15% to Non-Institutional Bidders and 10% to Retail Individual Bidders. 

Founded in 2006 by Ajay Adiseshan, PayMate has developed from a consumer-facing to a B2B payments platform based on digital technologies, with a customer base that spans across industries, including IT distribution, FMCG, paints, financial services, cement, auto auxiliary, travel and airline, media, manufacturing, and logistics.

In terms of transaction processing volume (TPV) processed, PayMate is said to be India’s largest B2B payments player of on-line, card-based payment-processing services, with a TPV of Rs 7773.1 crore in December 2021.

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