Paytm files prospectus with Sebi for Rs16,600-cr IPO

Paytm, India’s leading digital payments platform, has filed draft red herring prospectus with market regulator Securities and Exchange Board of India (Sebi) for raising up to Rs16,600 crore (about $2.2 billion) in an initial public offer (IPO).

Pytm, which is backed by Alibaba (which, alongside Ant Financial, owns 36 per cent equity stake), Berkshire Hathaway and SoftBank (about 18 per cent stake) among others, said it will issue new shares worth Rs8,300 and offer for sale shares worth another Rs8,300 crore.
The Noida-headquartered firm, which was until recently the most valuable startup in India, said it may raise up to Rs2,000 crore  (about $268 million) in a pre-IPO round. 
The startup, which competes with PhonePe and Google Pay in the world’s second-largest internet market, plans to use Rs4,300 crore of the fresh capital to broaden its payments services offering and about Rs2,000 crore to enter into new initiatives and explore acquisition opportunities.
Paytm, which was launched by Vijay Shekhar Sharma in 2009 as a digital payments app enabling users to top up credit using their phones, has expanded to areas like e-commerce marketplace, ticket booking, besides insurance sales and digital gold. 
Formally known as One97 Communications, Paytm was last valued at $16 billion, and has a user base of over 333 million, with an annual transactions volume of 114.3 million. It has onboarded over 21 million merchants, according to the prospectus.
Paytm offers a range of payment options on the Paytm app, which include Paytm Payment Instruments that uses digital wallets, subwallets, bank accounts, `buy now, pay later’ and wealth management accounts as also third-party instruments such as debit and credit cards and net banking.
Paytm is riding the success of other start-ups that raised funds from the market amidst the pandemic that has helped India’s digital economy to thrive at the cost of the brick-and-mortar economy. Food delivery giant Zomato’s $1.3 billion IPO was fully subscribed by retail and anchor investors in matter of hours.
Paytm’s rival MobiKwik also, earlier this week, filed for an IPO, to raise about $250 million. E-commerce giant Flipkart raised $3.6 billion at $37.6 billion valuation earlier this week, while insurance aggregator PolicyBazaar, makeup retailer Nykaa and delivery startup Delhivery, are all expected to list in the next three to four quarters.