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Paytm $2.3-Bn IPO: 11 Chinese Nationals Replaced on the Board. What We Know So Far

There are no Chinese Nationals on the Paytm board of directors as of now. (representational image)

There are no Chinese Nationals on the Paytm board of directors as of now. (representational image)

11 Chinese Nationals have been removed from the board of directors of Paytm and replaced with US and Indian citizens ahead of the IPO.

In the wake of the upcoming IPO for the fintech giant, Paytm, 11 Chinese nationals who were on the board, have been replaced by US and Indian nationals. Despite this, there are no changes in the existing shareholdings in the company according to a report by Reuters. The company has no Chinese nationals sitting on its board as of now. Members from Alipay, Ant Financials and Alibaba have been replaced. Many big names such as Jing Xiandong from Alipay, Guoming Cheng from Ant Financials and Michael Yuen Jen Yao (who is a US citizen) and Ting Hong Kenny Ho have left their positions on the board.

Company filings accessed by Reuters showed that Saama Capital’s Ashit Ranjit Lilani and SoftBank representative Vikas Agnihotri have joined the digital payments firm’s board of directors. The report by Reuters also suggests that Douglas Feagin, a US citizen, has taken the position of board representative for the Ant Group.

This turn of events comes prior to Paytm’s historical market debut with its head-spinning $2.3 billion initial public offerings (IPO) by the end of this year. When the fintech giant registers in November as per its plans, it will be doing so with an approximate valuation of $25 to $35 billion. The valuation of the company stood at only $16 billion in 2019 after it raised $1 billion in funds from its investors Softbank and Ant Financials.

SoftBank Vision Fund is one of the major shareholders in the company and has a share of around 19.63 per cent. Ant Financials holds a share of 29.71 per cent. Its other major shareholders SAIF Partners holds a share of 18.56 per cent while Vijay Shekhar Sharma holds a 14.67 per cent share in Paytm. Its minor shareholders include AGH Holding, T Rowe Price, Discovery Capital and Berkshire Hathaway, all of which hold less than a 10 per cent stake in the company.

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One97 Communications, Paytm’s parent company, is moving to raise Rs 12,000 crore ($1.6 billion) by issuing fresh equity. It is planning on getting the approval for this historic move in its extraordinary general meeting (EGM), which is supposed to be held on July 12, according to reports by Reuters. Paytm had received in-principle approval from the board for its $3 billion move to IPO. Another Rs 4,600 crore is supposed to be raised from the company’s sales of its equity shares of existing shareholders. The company is gearing up to file its paperwork in the coming week for the IPO mentions the Reuters report.

Parallelly, Paytm has also circulated an Offer for Sale (OFS) around the company, as it is offering its employees a chance to take part in this historical IPO and sell off their shares as well, according to a Bloomberg report. The company reported a revenue of Rs 3,186.60 crore for FY21 while also having cut its losses in FY21 to Rs 1,701 crore. This a 42 per cent reduction in company losses as FY20 recorded Rs 2,942.36 in losses. The annual revenue has also seen a significant increase as well in the fiscal year of up to Rs 2,100 crore.

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first published:July 07, 2021, 14:30 IST