A look at India’s biggest-ever IPO with ~US$2.5 billion target

Highlights

  • Indian market is all set to witness its biggest-ever IPO with the public listing of Paytm, formally known as One97 Communications.
  • Paytm shall raise roughly US$2.5 billion through the IPO, surpassing Coal India’s US$2 billion issue in 2010.
  • Paytm is backed by Ant Group, SoftBank and Berkshire Hathaway, who combinedly own around one-third of Paytm.

Fintechs across the globe have been at the forefront during COVID-19, benefitting significantly from the boost to contactless payments. The current year has also been a record year for share listings across various financial markets. 

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India’s biggest-ever IPO

India’s digital payments platform Paytm is creating headlines as the Company seeks to raise approximately US$2.5 billion. This also makes it the biggest-ever initial public offering (IPO) of the country, surpassing Coal India’s US$2 billion-issue in 2010.

IPO  

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Paytm, formally known as One97 Communications, is backed by Ant Group, which is owned by the Chinese tycoon Jack Ma, SoftBank and Berkshire Hathaway of Warren Buffett. All these combinedly own around one-third of Paytm.

Previously, Paytm had raised billions of dollars from anchor investors, significantly enhancing the Company’s value. Paytm’s anchor investors include reputed organisations like BlackRock and Canada Pension Plan Investment Board.

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Fast-tracked growth of Paytm

The IPO opens on Monday and shall make Paytm the most valuable tech company with a valuation of US$20 billion. This indicates a growth of 25% from two years ago and the Company has significantly advanced with the recent efforts of the Government to promote cashless and contactless transactions.

A look at India’s biggest-ever IPO with ~US$2.5 billion target

 

As per Reuters, the IPO is priced at the top of the range at US$28.9 for each share, although the IPO was received with less enthusiasm as compared to other tech firms that have been listed.

The number of users on the Paytm platform, which is also an all-in-one app, has escalated significantly over the years.

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Prior to this, the Company had also benefitted from the Government’s demonetisation of currency notes, which saw an increase in the uptake of cashless ways of payment.

As per Paytm’s regulatory filing in July 2021, the Paytm platform reported 114 million active annual users.

Digital Payments

Image Source: Merhan Saeed from Pixabay

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Bottom Line

With the fast-tracked digital transformation of the payments space, several companies in the industry have witnessed spiralling growth and expansion. Moreover, a steady transformation has also been seen across the payments industry over the years, with strong growth in the number of mobile payments.

The Indian market has witnessed a significant number of IPOs in 2021, with Paytm now set to become the biggest IPO of the country.  

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Moreover, Indian companies have already raised billions of dollars through IPOs this year, and many are on the list.

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