Paytm’s mega public listing proposal has received a nod from the Securities and Exchange Board of India (SEBI) for its Rs 16,600 crore initial public offering (IPO), according to two people privy to the matter.
SoftBank and Alibaba’s Ant Financial-backed One97 Communications, the parent company of fintech platform Paytm, is planning for a mid-November listing, the two persons confirmed.
In July, One97 Communications sought the securities regulator’s approval for its Rs 16,600 crore IPO, expected to be one of the country’s largest public listings.
As part of the IPO, India’s second most valuable startup will sell new shares worth Rs 8,300 crore and shareholders will sell stocks worth another Rs 8,300 crore in an offer-for-sale (OFS).
The mobile wallet-turned-payment banking services player is expected to use the proceeds for growth including customer and merchant acquisition and investing in new business initiatives, acquisitions, and strategic partnerships.
Vijay Shekhar Sharma, Paytm founder, managing director and chief executive officer, who owns 14.67% stake and Alibaba's Ant Group firms which hold 29.71% ownership will dilute some of their stake in the proposed OFS. Elevation Capital, SAIF Partners India, SVF Panther (Cayman) Ltd and BH International Holdings will also sell their stake in the IPO.
Paytm’s other shareholders include SoftBank Vision Fund at (19.63%) and AGH Holding, T Rowe Price, Discovery Capital and Berkshire Hathaway which hold less than 10% shareholding each in the company.
Meanwhile, the company is also re-evaluating its pre-IPO plans, according to recent reports and confirmation by the company.
In November 2019, One97 Communications raised $1 billion from new and existing investors including SoftBank Group in a move that valued Paytm at $16 billion.
Earlier this month, Paytm acquired a 100% stake in Urja Money Pvt Ltd, which provides a loan management system through its proprietary solution, CreditMate.
This week, another regulator Reserve Bank of India (RBI) imposed a penalty of Rs 1 crore on Paytm Payments Bank, run by One97 Communications, for violation of remittances law.
Last month, Paytm roped in former KPMG partner Rajendra Nalam as senior vice-president of corporate finance function to overlook Paytm’s newer initiatives, special projects, joint ventures and acquisition strategy.
Patym’s earlier attempt at IPO was shelved due to market volatility in 2010 when it was a value-added service (VAS) provider for telecom consumers and it had planned to raise Rs 120 crore ($28 million basis a decade old conversion rate) through an IPO.
According to the draft papers, its net losses narrowed to Rs 1,704 crore in FY21, from Rs 2,943.3 crore in FY20 and further from Rs 4,235.5 crore in FY19.
In two years Paytm's merchant base increased to 2.11 crore as of March 31, 2021, from 1.12 crore in March 2019. Its gross merchandise value also almost doubled to over Rs 4 lakh crore during last fiscal year ending March 2021 from Rs 2.29 lakh crore billion in FY19.