One97 Communications, parent company of digital payments platform Paytm, filed its draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) for a $2.2bn IPO.
The Softbank-backed company will issue new shares worth $1.1bn and offer sale worth of $1.1bn.
The share sale could make it India’s largest stock market debut ever, surpassing the IPO of the state-owned Coal India in 2010.
The startup, which competes with PhonePe and Google Pay in the world’s second-largest internet market, plans to use the fresh capital of $577m to broaden its payments services offering and about $269m to enter into new initiatives and explore acquisition opportunities.
Paytm, which was launched in 2009 to help users easily make digital payments from their phones, has expanded to a wide range of services in the past decade. It operates a payments gateway, e-commerce marketplace, ticket booking and also sells insurance and digital gold.
The platform has amassed over 333 million users, 114.3 million of whom transact annually, and has onboarded over 21 million merchants.
Some shareholders who are likely to sell a part of their stake as part of the book building process are founder and CEO Vijay Shekhar Sharma, Antfin Holding, Alibaba Singapore e-commerce, Elevation Capital, SAIF-III Mauritius/SAIF Partners India and BH International Holdings.
With 75% of the net offer reserved for qualified institutional buyers, 15% of the net offer shall be available for allocation on a proportionate basis to non-institutional investors and 10% will be reserved for retail investors. While the company is likely to reserve a portion of the offer for existing employees, the details have not been mentioned in the DRHP.
The company has appointed Morgan Stanley India Company, Goldman Sachs (India), Securities, Axis Capital as joint global coordinators for the public issue. Meanwhile, ICICI Securities, JP Morgan India, Citigroup Global Markets India and HDFC Bank have also been appointed as book running lead managers (BRLMs). Link Intime India has been appointed as the registrar of the issue.
Commenting on the IPO, Paytm MD & CEO Satish Gupta said, “It has been our constant endeavour to weave the convenience of seamless digital payments to all aspects of the lives of our users. By enabling @paytm UPI to apply for IPO we are giving millions of investors the ease of seamless, secure, and rapid payments to help enhance their financial portfolio. We believe that every Indian has a right to access capital markets and benefit from the burgeoning list of successful companies which are listing in the stock market.”
Paytm’s IPO plans come at a time when the pandemic has fuelled India’s digital economy and local stock exchanges are showing a growing appetite for consumer tech stocks. Indian food delivery giant Zomato’s $1.3bn IPO took only a few hours to be fully subscribed by retail and anchor investors.
Earlier this week, Paytm’s Sequoia-backed MobiKwik also filed for an IPO, in which it is seeking to raise about $250m. In addition, SoftBank-backed e-commerce giant Flipkart, which raised $3.6bn at $37.6bn valuation, insurance aggregator PolicyBazaar, make-up retailer Nykaa and delivery startup Delhivery, which announced a $100m investment from FedEx, may also list in the next three to four quarters.
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