Mumbai-based B2B payments and services provider PayMate India has filed its Draft Red Herring Prospectus (DRHP) with SEBI to raise funds through an initial public offering (IPO).
The ₹1,500-crore IPO comprises a fresh issue of ₹1,125 crore and offer-for-sale (OFS) of ₹375 crore.
Selling shareholders
Promoters Ajay Adiseshan and Vishvanathan Subramanian will offload shares worth up to ₹134.73 crore and up to ₹3.29 crore, respectively, as part of the OFS. Lightbox Ventures I, Mayfield FVCI and RSP India Fund Ltd. LLC will be selling shares worth ₹127.38 crore, ₹15.66 crore and ₹2.74 crore, respectively, as per the draft papers.
The OFS also includes shares worth up to ₹17.01 crore by IPO Wealth Holdings Pvt Ltd, ₹1.96 crore by G. Adiseshan, ₹11.45 crore by Uma Vishvanathan, ₹15.37 crore by Dhruv Pratap Singh, ₹26.56 crore by Probir Kumar Roy, ₹13.27 crore by Alexander Kuruvilla and ₹5.59 crore by Anand Rajaram. The offer also includes a reservation for subscription by eligible employees.
The offer is being made through the Book Building Process, wherein 75 per cent of the offer would be available to Qualified Institutional Buyers, 15 per cent to non-institutional bidders and 10 per cent to retail individual Bidders.
Additionally, the company may also consider a private placement of equity shares aggregating up to ₹225 crore in consultation with the lead bankers to the issue. If such placement is completed, the fresh issue size will be reduced.
As on date of the DRHP filing, the promoter and promoter group held 66.70 per cent in the company and the rest was held by public shareholders.
To expand business
The company will utilise the proceeds from its fresh issuance worth ₹77 crore for expanding its business into new geographies, ₹228 crore for pursuing inorganic initiatives and ₹688.70 crore for placing cash as collateral with its financial institution partners to improve its margins and general corporate purposes.
About PayMate
PayMate is a multi-payment category platform that incorporates vendor payments, statutory payments and utility payments, giving its customers a “fully-integrated” B2B payment stack. The platform also allows consumers and their vendors, suppliers, buyers, dealers, and distributors to use commercial credit cards to make statutory payments of direct taxes and GST, as well as utility payments.
As on December 31, 2021, it had 49,953 customers, of which 480 were enterprise customers and 49,473 were small and medium enterprises which subscribed for basic plan on its platform. Its enterprise customers include Crompton Greaves Consumer Electricals, Kansai Nerolac Paints, SBI Cards and Payment Services and Jay Bharat Maruti Ltd.
Visa Inc holds minor stake
Visa, which has a partnership with PayMate, also holds 2.94 per cent in PayMate . Visa cards accounted for more than 90 per cent. of commercial credit cards handled through the systems as of December 31, 2021.
The brand launched its platform in the UAE in 2018 through PayMate LLC, its subsidiary in the UAE, as a Visa-certified Business Payment Solution Provider. It aims to expand into other parts of Central Europe, West Asia and Africa (CEMEA) region as well.
The platform had a transaction processing volume (TPV) of ₹7,773 crore in December 2021.
PayMate’s revenue from operations increased 61.19 per cent from ₹216.14 crore in fiscal 2020 to ₹348.40 crore in fiscal 2021, while revenue for the nine-month period ended December 2021 stood at ₹843.44 crore.
ICICI Securities Ltd, HSBC Securities and Capital Markets (India) Private Ltd, JM Financial Ltd and SBI Capital Markets Ltd are the book-running lead managers, while Link Intime India Private Ltd is the registrar to the offer. The equity shares are proposed to be listed on the BSE and NSE.