Paytm board approves Rs22,000-cr IPO proposal

Online payments and financial services firm Paytm plans to enter the market with an initial public offer of around Rs22,000 crore. The board of directors of the digital payments company, which met on 28 May, gave its approval for the IPO, which could be the biggest so far in India.

The board of One97 Communications, the parent firm of Paytm, is reported to have given in-principle approval for the initial public offer.
Paytm, one of the leading players in the digital payments space, is aiming at a November listing in the Indian market, at a valuation of $25-$30 billion. The company was last valued at $16 billion when it raised $1 billion from Softbank and Ant Financial in 2019.
Paytm started off as a bill-payments, mobile recharge platform in 2010. It launched a mobile wallet in 2014 and has since obtained Reserve Bank of India’s approval as a payments bank.
Of late, Paytm has been trying to acquire market share across a spectrum of financial services offerings by launching mutual funds, wealth management, stock trading and insurance services. It has also applied for a New Umbrella Entity (NUE) licence, as part of a consortium comprising Ola, IndusInd Bank, Zeta, Suryoday Small Finance, among others. It has also applied for a general insurance licence.
For the year FY20, it posted revenues of Rs3,280 crore while its losses shrank 30 per cent to Rs2,942 crore. The company also narrowed its loss by 40 per cent on an year-on-year basis in the fiscal year 2019-20.
According to a note released by Bernstein, Paytm's revenue base is likely to double by financial year 2023 to $1 billion with non-payments revenue contributing 33 per cent.
The IPO will also give some of the existing investors an opportunity to offload some of their stake, reports citing informed sources said.
Paytm shareholders include Alibaba's Ant Group (29.71 per cent), Softbank Vision Fund (19.63 per cent), Saif Partners (18.56 per cent), Vijay Shekhar Sharma (14.67 per cent).
AGH Holding, T Rowe Price and Discovery Capital, Berkshire Hathaway hold less than 10 per cent stake in the company.
Paytm claims to be around 30-50 per cent larger than mobile apps in the segment with over 1.4 billion monthly transactions.