₹18,300-crore Paytm IPO to open on Nov. 8

The ₹18,300-crore initial public offering (IPO) by One97 Communications, the parent firm of Paytm, will open on November 8, valuing the company at close to $20 billion.

The price band has been fixed at ₹2,080 to ₹2,150 for the offer, which will close on November 10, the company said. The IPO, the largest since 2010 when state-owned Coal India raised ₹15,475 crore, comprises issuance of fresh equity shares worth ₹8,300 crore and offer for sale by existing shareholders of ₹10,000 crore. “We have been getting personal messages from investors requesting for an allocation in the Paytm IPO,” One97 Communications Managing Director and CEO Vijay Shekhar Sharma said in a pre-IPO conference on Thursday. “These people have never invested before in a listed company in India,” he added.

Paytm increased the issue size from the earlier ₹16,600 crore following increased investor demand.

Replying to a query on valuation, Madhur Deora, group chief financial officer, Paytm, said the company could have raised funds at a higher valuation, “but we don’t believe in getting every last dollar of valuation. We want to have really high quality investors and we create value for new investors coming in.”

For the three months ended June 2021, Paytm’s revenue from operations was up by 62% to ₹8,908 million in Q1FY22, from ₹5,512 million in Q1FY21.The growth was driven by payment and financial services offerings for which revenues stood at ₹6,894 million or about 77% of the revenues during the quarter.

Paytm’s losses stood at ₹3,819 million for the quarter, it said, adding that while marketing and promotional expenses of the company went up to ₹1,377 million for Q1FY22, the employee benefits expense grew to ₹3,507 million.

As per the company’s RHP, Paytm’s total user base has increased to 337 million registered consumers and over 21.8 million registered merchants, as of June 30, 2021.

“We are the largest payments platform17 in India, with a GMV of ₹4,033 billion in FY21 and ₹1,469 billion in the three months ended June 30, 2021. We processed a total of 5.9 billion and 2.3 billion merchant transactions in FY 2021 and in the three months ended June 30, 2021, respectively,” the company has said in the RHP.

Of the total net proceeds, the company plans to use ₹43,000 million in growing and strengthening its Paytm ecosystem, while ₹20,000 million will be invested in new business initiatives, acquisitions and strategic partnerships.

Mr. Sharma said that Paytm’s preference will always be ‘to build over buy’ and currently there is nothing that looks right enough for the company to buy. “But never say never… we would be very conservative about it,” he added.

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Printable version | Jan 24, 2022 12:09:35 AM |

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