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Paytm may shelve ₹2,000-crore pre-IPO placement

Our Bureau Mumbai | Updated on October 22, 2021

Paytm had filed the DRHP for its ₹16,600 crore IPO on July 16   -  REUTERS

Plans to hit capital market in first week of November after receiving SEBI’s nod

Home-grown digital payments major Paytm may choose not to go for a pre-IPO placement and go for direct listing by early next month.

Sources familiar with the development said that the ₹2,000-crore pre-IPO placement was just an option being considered by the company, but a final decision is yet to be taken.

“In the recent past, companies like Zomato have headed for an initial public offering without a pre-IPO round,” noted a market source.

The company may instead, choose to head straight for an IPO in order to adhere to certain timelines. “Even Paytm’s draft red herring prospectus (DRHP) mentioned a pre-IPO as just an option,” the source noted.

“Our company, in consultation with the Joint Global Coordinators-BRLMs and the BRLMs, may consider a further issue of equity shares, including by way of a private placement of equity shares aggregating up to ₹20,000 million, at its discretion, prior to the filing of the Red Herring Prospectus….,” the DHRP had said.

‘No valuation differences’

Paytm did not respond to an e-mail query by BusinessLine. A Bloomberg story said that the pre-IPO round may be dropped due to valuation issues. But sources close to the company said that “there are no valuation differences between investors and Paytm’s management. Paytm is heading for an IPO directly, to adhere to the timelines it had kept in mind.”

SEBI nod by next week

One97 Communications, the parent company of Paytm, had filed its DRHP with SEBI for its ₹16,600 crore IPO on July 16 this year. According to another source, SEBI approval for the listing is likely by early next week. The IPO could be launched either before Diwali or immediately after that.

“There are two options being worked upon. It will be decided soon depending on the approvals,” said the other market source.

The issue comprises a fresh issue of equity shares amounting to ₹8,300 crore and an offer for sale by existing shareholders of ₹8,300 crore.

Lead managers appointed to the issue include Morgan Stanley India, Goldman Sachs (India) Securities, ICICI Securities, Axis Capital, JP Morgan India, Citigroup Global Markets India and HDFC Bank.

Published on October 21, 2021

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