Paytm files DRHP with SEBI: India’s biggest IPO at Rs. 16000 crores

By Angel Broking | Published on 20th July 2021 | 38

Paytm files DRHP with SEBI: India’s biggest IPO at Rs. 16000 crores

Paytm filed preliminary papers with the Securities and Exchange Board of India to acquire funds worth Rs. 16600 crores or $2.2 billion.

This will be India’s biggest stock market listing in at least the past ten years.

Per the draft prospectus, the initial public offering will include a fresh issue and an offer for sale of the same proportion, i.e., Rs. 8300 crores.

Before we look into the details of this IPO, it’s imperative to be familiar with the company’s business model.

About Paytm

Paytm, a subsidiary of One 97Communications Ltd, is a fintech company based in Noida. It is India’s largest online mobile payments and commerce platform.

Besides features such as UPI payments, Paytm Wallet, and bill payments, individuals can invest in digital gold and mutual funds via the platform. Its offerings also include in-store payments and the Paytm Mall.

The company earns its revenue in the following ways:

  • Commissions
  • Escrow accounts
  • Cross-selling

Here are some of the top shareholders of Paytm’s holding company:

  • Vijay Shankar Sharma (14.67%)
  • Saif Partners (18.56%)
  • Softbank Vision Fund (19.63%)
  • Alibaba’s Ant Group (29.71%)

According to the company’s DRHP, some of these existing shareholders will liquidate their stakes in the upcoming IPO.

Objectives of the Paytm IPO

Paytm plans to utilise the net proceeds from its IPO for the following purposes:

  • Invest in new strategic collaborations and takeovers along with new business initiatives
  • Reinforce the Paytm ecosystem by expanding the customer base while increasing the retention rate.
  • Provide customers considerable access to financial services as well as technology.
  • Fulfil general corporate purposes.

Paytm IPO details

Individuals can check all the details concerning Paytm IPO here:

  • IPO opening date: Yet to be announced
  • IPO closing date: Yet tobe announced 
  • Type of issue: Book-built issue
  • IPO price band: Yet to be announced
  • Face value: 1 per share
  • Listing: NSE and BSE
  • Market lot: Yet to be announced
  • Minimum order quantity: Yet tobe announced

Note that we’ll update the details once the issuer discloses the information concerning the same.

Check the table for share allotment across various investment categories:

Investor category Allotment Percentage
Qualified institutional buyer (QIB) 75%
Retail investors 10%
Non-Institutional Investors (NII) 15%

According to sources, a maximum of 60% of the QIB portion might be reserved for anchor investors. Also, there will be a lock-in period of one year for shares acquired in the pre-IPO period.

Paytm’s competitive strengths

Here are the strengths of Paytm:

  • The company enjoys an established brand identity with a valuation exceeding $6 billion, according to a Kantar BrandZ India report in 2020.
  • Paytm’s customer base includes over 333 million users, including more than 20 million registered merchants.
  • This company is India’s leading provider of the digital payments service platform.
  • Paytm Super-app will let its users access an extensive range of digital payments services through smartphones.

Key financial highlights

The following are some essential financial highlights of Paytm from FY16 to FY21:

Year FY16 FY17 FY18 FY19 FY20 FY21
Revenue (in Rs. crores) 573 813 3234 3391 3350 2802
Expenditure (in Rs. crores) 1763 2047 4718 7254 5861 4503
Net Loss (in Rs. crores) 1190 1234 1484 3863 2511 1701

Final thoughts

Paytm is backed by shareholders with a proven track record of generating sizeable returns. Furthermore, the company appears to have a long-term viable business model, pioneering digital banking and e-commerce in India.

Accordingly, the Paytm IPO is attracting significant attention at present. That said, investors must consider certain aspects such as competitive strengths and weaknesses before subscribing to this IPO.

 

Frequently Asked Questions

  1. Who will be the registrar of Paytm IPO?

Link Intime India will be the registrar of this issue.

  1. Will Paytm IPO have an employee reservation?  

Paytm IPO will not feature a reservation for its employees.

  1. How can individuals subscribe to Paytm IPO via Angel Broking?

Registered users of Angel Broking can invest through their brokerage account via UPI. New users can open their DEMAT account to subscribe to the IPO.

  1. When is the Paytm IPO listing date?

The listing date is yet to be announced.