Paytm IPO: Subscription Starts Today; Check Price Band, GMP
The Initial Public Offer (IPO) of One97 Communications, which operates under the Paytm brand name, is now open for subscription. The Rs 18,300-crore offer is the biggest in the country after Coal India’s IPO in 2010, in which the state-owned company raised Rs 15,200 crore.
Paytm’s IPO is available in a price band of Rs 2,080 to Rs 2,150 per share, with a valuation of around Rs 1.48 lakh crore. The company skipped the pre-IPO funding round to accelerate the launch of the initial share sale. The IPO will close for subscription on November 10.
The Paytm IPO involves issue of fresh equity shares worth Rs 8,300 crore and Offer for Sale (OFS) by existing shareholders worth Rs 10,000 crore. Through the OFS, One97 Communications Managing Director and CEO Vijay Shekhar Sharma will sell shares worth up to Rs 402.65 crore, while Entfin (Netherlands) Holdings will sell shares worth Rs 4,704.43 crore. In addition, Alibaba.com Singapore E-commerce will sell shares worth up to Rs 784.82 crore, Elevation Capital V FII Holdings (Rs 75.02 crore), Elevation Capital V Limited (Rs 64.01 crore), SAIF III Mauritius (Rs 1,327.65 crore), SAIF Partners . (Rs 563.63 crore), SVF Partners (Rs 1,689.03 crore) and International Holdings (Rs 301.77 crore), according to the offer document.
At a pre-IPO conference on Thursday, Sharma said he has received personal messages from investors who want to invest in the country for the first time and said that “this is the era of India”.
Paytm President and Group CFO Madhur Deora said that ever since the company filed the DRHP (Draft Red Herring Prospectus), the interest from Indian and global blue chip investors has been tremendous. “We have always had a very high quality share base which has benefited us,” Madhur said.
Last week, Paytm said it raised Rs 8,235 crore from anchor investors ahead of its initial share sale. According to stock exchange filings, the anchor investor round saw participation from BlackRock, CPPIB, Birla MF, GIC and other blue-chip funds, leading to over 10 times oversubscription of shares. BlackRock invested Rs 1,045 crore, Canada Pension Scheme Investment Board Rs 938 crore and GIC Rs 533 crore. This round includes pension funds, retirement funds as well as the Government of Singapore, CPPIB, ADIA, APG, New York City, Texas Teachers Retirement, NPS Japan, University of Texas, NTUC Pensions from Singapore, and the University of Cambridge. The largest dedicated emerging market investors such as Standard Life Aberdeen, UBS and RWC have also invested. With this Paytm has already bagged 45 per cent of its Rs 18,300 crore IPO. The size of Paytm’s anchor round can be said to be the eighth largest private company IPO in India alone.
“Big tech firms are going for the big hit and Paytm is next in line, gearing up for the biggest IPO of the decade. It is highly likely to be a successful IPO, from a long-term perspective, it is more than a speculative one. Sounds like a prudent investment bet,” said Richa Agarwal, senior research analyst at Equitymaster.
According to research firm RedSeer, Paytm has around 40 per cent mobile payment transaction volume market share and 65-70 per cent wallet payment transaction market share in India by FY21. According to the proposal document, demonetisation also played out in 2016. The role played in motivating merchants to accept payments digitally and products such as QRs and Wallets grew.
Digital payments are expected to grow from USD 20 trillion in FY21 to USD 40-50 trillion by FY2026, with several factors including government initiatives and reforms, improving technology, increasing access and awareness.
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