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Paytm looking to launch ₹16,600 crore IPO by October

PTI New Delhi | Updated on July 27, 2021

The company plans to raise ₹8,300 crore through fresh equity issuance and another ₹8,300 crore through an offer-for-sale

Digital payments and financial services firm Paytm wants to hit the market with its ₹16,600 crore IPO at the earliest and very likely by October, sources said on Monday.

The company had filed draft papers for its initial share sale with the market regulator SEBI on July 15. It expects a response from the capital market watchdog by mid-September, after which it plans to proceed with listing as early as possible.

“It is assumed that SEBI takes two months to revert on the draft red herring prospectus. The company is looking forward to it. Once the documents are received, Paytm will file for IPO. The process is dependent on regulatory approvals. If it goes as per expected timelines, then the IPO should be in place by October,” a source tracking the development closely told PTI.

An email query sent to Paytm did not elicit any response.

According to the draft document, the company plans to raise ₹8,300 crore through fresh equity issuance and another ₹8,300 crore through an offer-for-sale.

Paytm founder, Managing Director and Chief Executive Officer Vijay Shekhar Sharma and Alibaba group firms will dilute some of their stake in the proposed offer-for-sale.

Alibaba group firm Antfin (Netherlands) Holding BV will be selling at least 5 per cent stake to bring its shareholding below 25 per cent to comply with regulatory requirements, as per another source.

According to the document, investors selling stake include Antfin (Netherlands) Holding BV (which has 29.6 per cent stake), Alibaba.Com Singapore E-Commerce (7.2 per cent) and Elevation Capital V FII Holdings (0.7 per cent).

Moreover, Elevation Capital V (which has 0.6 per cent stake), SAIF III Mauritius Company (12.1 per cent), SAIF Partners India IV (5.1 per cent), SVF Panther (Cayman) (1.3 per cent) and BH International Holdings (2.8 per cent) will also sell stake.

Fund usage

The company has proposed to use ₹4,300 crore for growing and strengthening the Paytm ecosystem, including through acquisition of consumers and merchants and providing them with greater access to technology and financial services.

Paytm plans to earmark ₹2,000 crore for business initiatives, acquisitions and strategic partnerships and up to 25 per cent of the total fund raised through the IPO for general corporate purposes.

According to the document, Paytm’s merchant base grew to 2.11 crore as on March 31, 2021 from 1.12 crore in March 2019, and gross merchandise value almost doubled to over ₹4 lakh crore in the financial year from ₹2.29 lakh crore in FY19.

The company has reported a narrowing of loss to ₹1,704 crore in FY21, from ₹2,943.3 crore in FY20 and ₹4,235.5 crore in FY19.

The total income declined to ₹3,186.8 crore in FY21, from ₹3,540.7 crore in FY20.

Paytm has reported negative cash flow of ₹222.1 crore in FY21 primarily due to operating losses and on account of additional working capital requirement.

Published on July 27, 2021

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