Paytm, India’s most valuable startup has confirmed its plan for an IPO (Initial Public Offerings). It has started the IPO process with the notice to its shareholders.
Paytm has received in-principle approval from its board for the IPO and is finalizing the draft red herring prospectus, which could be filed by the first week of July, sources said. Morgan Stanley is working with Paytm on the IPO.
This is not One97’s first attempt to go public. In 2010, the company had planned to raise Rs 1.20 Billion through an IPO but it could not due to some regulatory aspect.
Also Read: LIC IPO: All you need to know
The IPO date has not been announced, however, the IPO is expected to be listed before the end of the current calendar year. The price band and the per-share price is also yet to be decided, however, in the gray market the per-share price is Rs. 15000-17000.
We can see more Startup IPO’s this year. Zomato and CarTrade have already filed their DRHPs (Draft Red Herring Prospectus), PolicyBazaar, and Delhivery are going to file the DRHPs soon.
Merchant Banker for Paytm IPO
Paytm has appointed JP Morgan, Morgan Stanley, Goldman Sachs, and ICICI Securities as Merchant bankers also called Investment bankers for its upcoming initial public offering (IPO). One97 Communications, the parent company of Paytm is looking to appoint more merchant bankers such as Morgan Stanley and Citigroup Inc for the IPO.
Paytm IPO Size
Paytm is going for an IPO of $3 billion or around Rs 22,000 crore on the basis of a valuation of approx $30 billion. If everything goes well, this could be the largest IPO in India. In the year 2010, Coal India brought India’s largest IPO valuing more than Rs 15,000 Crore.
Impact of Paytm IPO on the employees
Paytm is the largest fintech in India, It has asked employees, whether they wish to sell the shares in the upcoming IPO. As per the notice given by Paytm to its employees, those employees who wish to sell the shares would need to transfer the shares to an escrow account, details of which would be shared separately.
The offer for sale, or OFS, will allow employees to sell their shares as part of the IPO. If the size of the issue is not enough to accommodate all the shares offered by employees, the shares will be accepted on a pro-rata basis.
Equity shares not sold during the offering would be locked in for a 1 year period, the notice said.
According to the Company’s Annual Report the financial results are as below:
|Rs in Crore||Rs in Crore|
Valuation of Paytm
Paytm was last valued at $16 billion in the year 2019. Paytm is going for an IPO of $3 billion or around Rs 22,000 crore on the basis of revised valuation which is approx $30 billion. The company’s key investors are Berkshire Hathaway Inc., SoftBank Group Corp, and Ant Group Co.
Comment: Considering the business model and financial numbers, the valuation seems to be reported on the higher side.
Paytm IPO Performance
The performance of the Paytm IPO will largely be based on the sentiments. How the economy behaves or stability of the government as the elections are ahead. The share may be bullish if the market is bullish and it may be bearish if the market is going down.
FAQs on Paytm IPO
The prerequisites for IPO are booming and Paytm IPO should be launched in the coming months.
Paytm IPO size is expected to be around $3 billion or around Rs 22,000 crore.
Morgan Stanley, an investment banking company, is collaborating with Paytm.
You can apply for the IPO through ASBA (Application Supported by Blocked Amount), almost all the banks are providing this facility.
Yes, you can buy IPO through Paytm money, it is same like other Indian financial services company, that offers Mutual Fund, Stock Market and NPS retirement funds.
The Paytm IPO price band is yet to be decided, however, in the gray market the shares of Paytm were available anywhere between Rs. 12000-13000 per share.
Paytm share is not listed in any Stock Exchange. Paytm IPO will be listed on the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange).
Nothing has been finalized till now on the book building part.
The company was valued at $16 billion when it raised $1 billion from Japanese investor SoftBank Group Corp and Ant Financial Services of China in 2019.
Coal India Ltd’s IPO in 2010, is the country’s largest IPO to date. Coal India Ltd raised more than 150 billion rupees in 2010 in the country’s largest IPO.
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