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Paytm $3-Billion IPO by November: What We Know So Far

Paytm on the road to make a historical market debut, invites employees to join by selling shares

Paytm on the road to make a historical market debut, invites employees to join by selling shares

Paytm will make its historical IPO listing in late November. The company has given employees an offer for sale so they can sell their shares.

Paytm is all set to launch its mega initial public offering (IPO) worth $3 billion by the end of this year. It’s going to be the biggest in India’s history. One97 Communications, which is Paytm’s parent company has given in-principle approval for the IPO, according to reports. On a related note, the eight members of the board met on May 28 to approve the IPO. Following this, the in-principle offering plans were approved. The draft red herring prospectus (DRHP) is also in the process of being finalised. The fintech giant is planning to list in India by November at a valuation of $25 to $35 billion. The company’s previous valuation stood at $16 billion after it raised $1 billion from investors Softbank and Ant Financial in 2019.

Paytm is also asking its employees if they want to sell their shares in this historical IPO. Parent company One97 Communications circulated an offer for sale (OFS) notice around to its staff as it prepares for its stock market debut, according to Bloomberg News. This OFS will allow the employees to sell their shares as part of the massive IPO. The document states that the preliminary approval was given by the board but the formal approval cannot take place until the DRHP is finalised. The market listing will be a mix of new and existing shares in order to meet the regulatory benchmarks that are in place.

As per the company’s annual report, the company has reported a revenue of Rs 3,186.60 crore for FY21, which is amongst the top ranks in the industry. The secret behind this revenue is the multi-stack approach that the company has built over the years. Services and platforms like Paytm Wallet, Paytm UPI, Paytm Payments Bank account, Paytm Postpaid, Paytm FASTag, Paytm Food Wallet, Paytm Wealth Management accounts, credit and debit cards make for several lucrative avenues.

The fintech titan’s losses have been cut nearly in half, as the annual report suggests that the losses have reduced in FY21 to Rs 1,701 crore. This marks a 42 per cent reduction in losses as FY20 recorded Rs 2,942.36 in losses. This feat was achieved by way of streamlining and reworking operations, while also optimising marketing and direct/indirect costs to the company. The annual revenue has therefore seen a significant increase as well in the fiscal year of up to Rs 2,100 crore.

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Even with the pandemic taken into consideration and the impact on the economy, Paytm’s financial services and payments revenues went through the roof. In FY21 the revenue was Rs 2,190 crore – an 11 per cent uptick from FY20’s Rs 1,906. “We expect Paytm’s revenue base to double by FY23 to $1 billion, with non-payments revenue contributing 33%, led by credit tech,” said a report by Bernstein analysis.

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first published:July 04, 2021, 08:00 IST