The parent firm of financial platform Paytm,
One97 Communications, has filed draft documents for an initial public offering
(IPO) to raise Rs 16,600 crore, making it the latest in a long line of Internet
companies to list on Indian stock exchanges.
While Rs 8,300 crore will go toward initial
share sales, another Rs 8,300 crore will go toward selling existing investor’s
According to the draft prospectus, Rs 4,300
crore will be utilized for growth, including customer and merchant acquisition,
and Rs 2,000 crore for new business initiatives, acquisitions, and strategic
This will also be India's largest public
offering to date, surpassing Coal India's record of Rs 15,000 crore raised over
a decade ago, demonstrating institutional investor's desire for new-age
Mobikwik has already filed its
draft documents, while Zomato's IPO opened for subscription on July
14 and is expected to list later this month. Policybazaar and Nykaa are
also anticipated to follow suit, hoping to capitalize on the positive response
from institutional investors, foreign funds, and market momentum.
Paytm's move to file a Draft Red Herring
Prospectus (DRHP) with market regulator Sebi comes only days after the
company's shareholders authorized a new share offering for Rs 12,000 crore at
an extraordinary general meeting.
Shareholders also nodded for the
declassification of Paytm founder and CEO Vijay Shekhar Sharma as a promoter,
despite the fact that he does not own the required 20% share in the company.
Sharma presently has 14.61 percent of the company's stock.
This aligns with Paytm's intentions to become
a PMC, or professionally managed company, which necessitates SEBI approval. No
single entity can own more than 25% of the corporation under this rule. Aside
from the adoption of new articles of association, the stakeholders approved
changes to the Employee Stock Options Plan on July 12.
Paytm's income for FY 20-21 was Rs 3,186
crore, down from Rs 3,540 crore the previous year. It reduced losses to Rs
1,701 crore from Rs 2,942 crore the previous year during the same period.
According to records with the registrar of
companies (ROC), Jing Xiandong of Ant Group has stepped down from One97's board
and has been replaced by Douglas Lehman Feagin. Feagin is Ant Group's senior
vice president and is based in the United States.
Vijay Shekhar Sharma started One97 in the
year 2000. It began as a value-added service provider and has since evolved
into an online mobile payments company.
This isn't One97's first attempt to
go public. In 2010, the company, which at the time provided telecom
consumers with value-added services (VAS), planned to raise Rs 120 crore ($28
million) through an IPO (IPO). Because of the market's volatility, it had to
cancel its strategy.
Paytm is presently India's second most
valuable Internet firm, with a market capitalization of $16 billion following a
billion-dollar funding round led by T Rowe Price, Discovery Capital, and D1
Capital in November 2019.
In addition to these investors, the company's
significant stakeholders include Ant Financial Netherlands, Alibaba Singapore,
three Elevation Capital funds, SoftBank Vision Fund, and BH International
Paytm will surpass ed-tech business Byjus,
which is presently the country's most valuable private internet Company, if it
goes public at the $25-30 billion valuation it is aiming.