AUS
NZ
UK
CA
USA
IND
Paytm, the digital payments start-up of India, is set to launch its Initial Public Offering (IPO) worth INR166 billion (US$2.2 billion), it informed the country’s market regulator – Securities and Exchange Board of India (SEBI) – in a draft red herring prospectus.
The fresh issue of INR166 billion would be financed in two different ways –it will issue new shares worth INR83 billion and an offer for sale worth INR83 billion by existing shareholders – a group that includes Japan’s SoftBank, China’s Ant Group and Warren Buffett’s Berkshire Hathaway, along with Paytm’s high-profile founder Vijay Shekhar Sharma.
As part of its pre-IPO process, in a bid to reduce the size of new shares issued, the company plans a placement of INR20 billion before the listing.
According to the company, the proceeds from the listing will be utilised towards growth and strengthening its payments ecosystem, besides investing in the new business initiatives, acquisitions and partnerships.
However, the company warned of the downside to its expansion plans due to the regulatory environment and a gamut of other factors – including the ongoing COVID-19 pandemic.
“This could be due to risks or uncertainties associated with expectations relating to, and including, regulatory changes pertaining to the industries in India in which we operate and our ability to respond to them,” the company said in a draft red herring prospectus (DRHP).
A DRHP is a preliminary registration document prepared by merchant bankers for prospective IPO-making companies in the case of a book-building issue. It includes information that is necessary to issue an IPO.
The company offers payment services, financial services, commerce and cloud services to 333 million consumers and over 21.1 million merchants, as on March 31, 2021.
Global investment banks Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) are acting as global lead manager for the listing.
The Noida-based company was founded in 2009, the company initially started off as a platform that allowed Indians to pay their bills and top up their mobile plans. Owned by One97 Communications Ltd, the company’s name has become synonymous with India’s digital payment space. The unilateral decision to demonetise the high-end notes by Indian Prime Minister Narendra Modi in 2016 and the ongoing pandemic have benefitted the growth of the start-up as well, along with massive push towards diversification.
The listing of Paytm, along with fellow start-up Zomato, is also seen as coming of age for the India’s thriving start-up ecosystem. There are whopping 52,567 start-ups registered with the Department for Promotion of Industry and Internal Trade (DPIIT) – which is the agency responsible for growth of industries in India.
