Paytm India’s leading start-up planning for IPO | Latest updates
Started by Vijay Shekhar Sharma in 2010, Paytm is now dominating the Fintech space in India. It is actually the country’s most valuable Unicorn. They have over 350 million users on their platform and they forayed into new markets like wealth management through Paytm money, E-Commerce through Paytm mall and online gaming through Paytm games.
It is growing in a tremendous space. The company’s investors which include SoftBank, Ant Financial, T. Rowe Price and Alibaba are thrilled with Paytm. They have invested a massive 4.4 billion dollars into the company over the years. While Paytm does compete with other players like Google and Phone pe it is way ahead of its competition. The huge amount of financial support that it has received is likely to further establish its position as a market leader.
Paytm started its mobile journey as an online mobile recharge website as well as an app. Today it is spreading its wings into various areas like movie ticket bookings, hotel room bookings, bus or train ticket booking as well as online shopping. The best of the features offered by Paytm is Paytm mobile wallet and E-wallet. E-wallet means it’s like a small savings bank account where you can add money or transfer money from your account to your friends or relatives account.
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Paytm, India’s most precious startup, approved to its shareholders and employees on Monday that it is set to file for an IPO.
Due to the beginning of pandemic scare, the IPO market in FY21 was the most active ever and grabbed pace and in three years via IPOs 30 companies raised more than Rs 30,000 crore. In the startup ecosystem too, some of India’s biggest startups, including Flipkart, Zomato and Nykaa, have all placed their vision on a public market debut, encouraged by rising valuations, a healthy investor appetite, and plans to scale.
As per the source common with the matter, Paytm’s initial public offering (IPO) is likely to take place this year
If it hits success, Paytm’s listing will be the largest stock market debut ever in India, beating the IPOs of Coal India ($2.06 billion), Reliance Power ($1.61 billion), General Insurance Corporation (GIC) ($1.55 billion) and Oil and Natural Gas Corp (ONGC) ($1.45 billion).
In a letter to shareholders and employees, Paytm specified that it aims to upraise money by giving fresh equity in the IPO, and also sell existing shareholders’ shares at the event. The startup has exhibited its employees the choice to sell their stakes in the firm.
It is for the first time the Noida-headquartered company that is valued at $16 billion and has raised over $3 billion to date, has commented on its plans about the IPO. The startup stated in the letter that it has accepted an in-principle approval from the board of directors to seek the public market.
Paytm, which is supported by Alibaba and SoftBank, hasn’t shared when it aimed to file for the IPO, but has gathered shareholders’ response to their plan to sell stakes by the end of the month.
Two sources familiar with the matter told that Paytm plans to raise about $3 billion and is targeting a valuation of up to $30 billion in the IPO
Paytm had thought of exploring the public route even before. Precisely 10 years ago, long before Paytm launched itself as the largest mobile wallet firm and widened to different financial and commerce services, the startup had filed with the regulator with the strategy to become public. But unfortunately the startup at the time cancelled the IPO and rather raised money from VCs to explore new avenues for development.
A lot is riding on an affluent IPO of Paytm which announced a unified loss of $233.6 million for the financial year that ended in March this year, down from $404 million a year ago. (The startup’s revenue fell 10% during this period to $437.6 million.) India’s stock markets are yet to be completely tested for tech startups’ stocks in the country, though retail investors have shown great signs in recent years.
This startup, which raises challenges with Google Pay and Flipkart-backed PhonePe, has reorganized its payments plans in recent years to imagine a leadership status in the merchant payments market.
In a report to its consumers late last month, analysts at Bernstein said the startup’s credit tech vertical is likely to lead the next wave of its revenue growth.
“With the advent of UPI, there has been a rising narrative that questioned Paytm’s market leadership,” the analysts wrote, citing to the exponential development of payments stack developed by retail banks in India that has been accepted by various firms, including Google and PhonePe (as well as Paytm), and which has quite descended the appeal of mobile wallets in India.
“However, under the hood, Paytm leads on merchant payments and has built an ecosystem of synergistic fintech verticals around its ‘super-app.’ The ecosystem spans payments (wallet/UPI), full-suite merchant acquiring, credit tech, digital bank, wealth, and insurance tech. We believe the super-app battle in India is not a ‘winner takes all’ but a game of execution, business building, and creating a superior customer experience with ecosystem integration,” Bernstein analysts added.
The startup, officially called One97 Communications, sent the “offer for sale” to its employee as it plans to file for the IPO, as per the documents reviewed by Bloomberg News.
Paytm’s board has confirmed the offering plans in principle and is finalizing the draft red herring prospectus, which could be filed as soon as the first week of July, according to a person familiar with the matter.
One97 Communications “is proposing to undertake an initial public offering of its equity shares (“equity shares”), subject to market conditions, regulatory, corporate and other approvals, and other relevant considerations, in accordance with applicable law, and has received an in-principle approval from the board of directors of the company in this regard,” Amit Khera, One97’s secretary, said in the notice to employees and shareholders.
It is found that if the plan is approved, Paytm’s maiden share sale would be higher than Coal India’s offering, which eased more than 150 billion rupees in 2010, the country’s biggest IPO as yet. Banks shortlisted to organize the Paytm IPO comprising Morgan Stanley, CitiGroup Inc. and JP Morgan Chase & Co. Morgan Stanley is presently the leading contender, according to the person quoted in the Bloomberg report. The public matters will comprise a blend of new and existing shares in order to meet regulatory obligations.
Employees can take part in the IPO by agreeing to provide all or part of their equity shares, a decision that would need to be confirmed before the filing of the first of the offering documents to the country’s regulator. Equity shares not sold during the offering would be locked-in for a one-year period, the notice said.
It is worth mentioning that while there are a lot of digital payment companies operating in India at the moment, Paytm has the biggest market share amongst all of them. Paytm has over 20 million merchant partners and its users make an average of 1.4 billion monthly transactions, according to figures recently updated on a company blogpost.
Paytm is the leading Indian giant startup that has shown an interest in becoming public in recent months. Earlier this year, food delivery startup Zomato stated it aims to raise $1.1 billion through an initial public offering. It was reported last month that Flipkart was in a mind to raise over $1 billion in what is predicted to be its financial fundraise ahead of an IPO.
