- SoftBank, Berkshire Hathaway, Ant among payments firm’s backers
- IPO likely to be the biggest since flotation of India Coal in 2010
(AF) SoftBank-backed Indian digital payments startup Paytm has filed for an initial public offering (IPO) of up to 166 billion rupees ($2.23bn) seeking to capitalise on a new listings market that’s forecast to set a record this year.
The IPO will include an issue of new shares worth 83bn rupees and an offer for sale worth 83bn rupees, said Paytm, which is also backed by investors including Berkshire Hathaway and China’s Ant Group. The details were revealed in draft papers submitted to India’s market regulator on Friday.
“Shareholders have approved all the proposals at the extraordinary general meeting. The shareholders have approved the proposal to raise capital and the fresh issue of shares,” news agency PTI reported, citing a source.
The sale is the latest planned in a frothy Indian IPO market that’s seen valuations soar as the BSE stock market has tested record highs. Earlier this week food-delivery company Zomato’s $1.3bn IPO was oversubscribed 1.05 times. Alibaba, Policybazaar, PharmEasy, Nykaa, and Delhivery Ixigo are all reportedly aiming to float by year-end.
Investor sentiment is being buoyed by analyst forecasts that the country’s embrace of technology-based retail and e-commerce will fuel a strong rebound after devastating waves of Covid infections decimated the economy last year. Researcher Prime Database expects IPOs to raise more than the $11bn fetched in 2018.
Strengthen Ecosystem
Another beneficiary is likely to be CarTrade, which filed its prospectus with the Securities and Exchange Board of India in May. It’s also good news for Zomato’s investors including Ant Financial, Alipay, Fidelity, Baillie Gifford, Canada Pension Plan, Mirae Asset, T. Rowe Price, and Steadview.
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Noida-based Paytm, which is owned by One97 Communications, said it would use the IPO proceeds to strengthen its payment ecosystem and for new business initiatives and acquisitions.
One97 posted a consolidated net loss of 17bn rupees for the year ended March 31, lower than the previous year’s 28.4bn rupees loss, according to the prospectus. Revenue slipped 14.6% to 28bn rupees.
Started a decade ago as a platform for mobile recharging, Paytm grew rapidly after ride-hailing firm Uber listed it as a quick payment option.
Covid Recovery
Its IPO plans come amid a pandemic-fuelled expansion in India’s digital economy and an intensifying battle for market share with Alphabet’s Google Pay and Facebook-owned WhatsApp Pay.
Adoption of digital payments has risen since India’s 2016 ban on high-value currency bank notes, helping Paytm expand its services to include insurance and gold sales, movie and flight ticketing, and bank deposits and remittances.
The company was planning to raise $268 million in a pre-IPO funding round, a source told Reuters on Monday.
Paytm’s $2.2bn raise through the IPO would make it among India’s biggest public listings after state-run miner Coal India in 2010 and Reliance Power in 2008.
JPMorgan Chase, Morgan Stanley, ICICI Securities, Goldman Sachs, Axis Capital, Citi and HDFC Bank are the booking running managers for the IPO.
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Reporting by Reuters
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