Paytm has gotten market regulator SEBI’s permission for its Rs 16,600 crore initial public offering, according to a source familiar with the process. The business plans to list on the stock exchanges by the end of the month, skipping the pre-IPO share sale rounds to expedite the process. “SEBI has approved Paytm’s initial public offering,” a source said on condition of anonymity. According to the source, the company’s decision to postpone the pre-IPO financing is unrelated to valuation disparities.
If successful, the proposed IPO would be the largest of its kind. The Rs 15,200-crore initial public offering (IPO) of Coal India in 2010 was the country’s largest to date. Paytm is valued at between Rs 1.47 and Rs 1.78 lakh crores. The firm’s unlisted shares have been assessed at Rs 2,950 each by US-based valuation specialist Aswath Damodaran, a finance professor at New York University’s Stern School of Business.
According to the draught IPO filings, the business wants to raise Rs 8,300 crores through a fresh issue of equity shares and another Rs 8,300 crores through an offer-for-sale. Vijay Shekhar Sharma, the founder, managing director, and chief executive of Paytm and Alibaba Group companies, would sell a portion of their interest in the planned offer-for-sale.
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According to a source, Alibaba group business Antfin (Netherlands) Holding BV is anticipated to sell at least 5% of its stock to lower its holdings below 25% to meet regulatory requirements. According to the records, Antfin (Netherlands) Holding BV (with a 29.6 percent ownership), Alibaba.com Singapore E-Commerce (7.2 percent), and Elevation Capital V FII Holdings are among the investors selling their stakes (0.7 percent).
The business plans to invest Rs 4,300 crores in expanding and enhancing the Paytm ecosystem, particularly by acquiring customers and merchants and giving them better access to technology and financial services. Paytm intends to set aside Rs 2,000 crores for business initiatives, acquisitions, and strategic alliances, as well as up to 25% of the total funds received via the IPO for general corporate reasons.
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Paytm’s merchant base increased to 2.11 crores on March 31, 2021, up from 1.12 crores in March 2019, and gross merchandise value (GMV) nearly quadrupled to over Rs 4 lakh crores. The company’s loss shrank to Rs 1,704 crores in FY21, down from Rs 2,943.3 crores in FY20 and Rs 4,235.5 crores in FY19. In FY21, total revenue fell to Rs 3,186.8 crores, down from Rs 3,540.7 crores in FY20. Paytm had a negative cash flow of Rs 222.1 crores in FY21, owing to operating losses and the need for extra working capital.
