Digital payments and financial services firm Paytm has received markets regulator Sebi's approval to launch an initial public offering, through which it plans to raise Rs 16,600 crore.

Share Market Live

NSE

This will be the biggest IPO in India to date in terms of size. The listing could be some time in November, sources said.

Large investors ANT, Alibaba, Softbank, Elevation Capital are set to sell shares through the OFS, as per the document. Founder Vijay Shekhar Sharma is himself expect to sell some shares. Berkshire Hathaway and Ratan Tata's RNT Associates are also listed as selling shareholders.

Paytm had said that it is a foreign-owned company and will continue to be after the IPO.

Paytm IPO comprises fresh issues of up to Rs 8,300 crore, offer for sale of up to Rs 8,300 crore. As per the draft prospectus, JPMorgan Chase, Morgan Stanley, ICICI Securities, Goldman Sachs, Axis Capital, Citi and HDFC Bank are among the lead book-running managers for Paytm IPO.

According to the document, the company plans to raise Rs 8,300 crore through fresh equity and another Rs 8,300 crore through offer-for-sale. One97 Communications Ltd, the owner of Paytm, which filed the draft, said the proceeds of the IPO will be used to "strengthen its payment ecosystem and for new business initiatives and acquisitions".

Also Read:

Sebi proposes minimum price band for IPOs, sub-categorisation of NIIs

Paytm shareholders include Alibaba's Ant Group (29.71 percent), SoftBank Vision Fund (19.63 percent), SAIF Partners (18.56 percent) and Vijay Shekhar Sharma (14.67 percent). AGH Holding, T Rowe Price, Discovery Capital and Berkshire Hathaway hold less than 10 percent stake each in the company

According to the document, investors selling stake include "Antfin (Netherlands) Holding BV, Alibaba.Com Singapore E-Commerce Private Ltd, Elevation Capital V FII Holdings Ltd, Elevation Capital V Ltd, SAIF III Mauritius Company Ltd, SAIF Partners India IV Ltd, SVF Panther (Cayman) Ltd and BH International Holdings".

Also Read: Freshworks IPO: Back home in Chennai, it’s one big party

The company proposes to use Rs 4,300 crore for growing and strengthening the Paytm ecosystem, including through the acquisition of consumers and merchants and providing them with greater access to technology and financial services.

Paytm plans to earmark Rs 2,000 crore for business initiatives, acquisitions and strategic partnerships and up to 25 per cent of the total fundraised through the IPO for general corporate purposes.

The draft red herring prospectus (DRHP) does not disclose the share price and the percentage of stake to be diluted by any of the shareholders in the company.

Also Read: Why startup IPO can be a good bet

"The final price at which equity shares will be allotted to ASBA Bidders will be in terms of the red herring prospectus and the prospectus. Equity shares will be allotted to anchor investors at the anchor investor offer price, which will be decided by our Board or the IPO Committee, as applicable, in consultation with the JGC-BRLMs and the BRLMs, in terms of the red herring prospectus and the prospectus," the DRHP said.

According to the document, Paytm's merchant base grew to 2.11 crore as of March 31, 2021, from 1.12 crore in March 2019 and gross merchandise value almost doubled to over Rs 4 lakh crore in the financial year (FY) from Rs 2.29 lakh crore billion in FY 2019.

The company has reported a narrowing of loss to Rs 1,704 crore in FY21, from Rs 2,943.3 crore in FY20 and Rs 4,235.5 crore in FY19. The total income of Paytm declined to Rs 3,186.8 crore in FY21, from Rs 3,540.7 crore in FY20. Paytm has reported a negative cash flow of Rs 222.1 crore in FY21, primarily due to operating losses and on account of additional working capital requirements.

Also Read: Freshworks IPO: More than 500 employees become crorepatis

(Edited by : Jomy Jos Pullokaran)

First Published:Oct 22, 2021 5:37 PM IST