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Bidding for largest ever public issue to start at 10 am
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Paytm IPO for decent Listing Gain and Investment
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Issue Opens - 8th Nov, 2021 (Monday)
Issue Closes - 10th Nov, 2021 (Wednesday)
Issue Size - Rs 18300 crore at Upper Band
Price Band - Rs 2080-2150
Minimum Lot Size - 6
Minimum App Amount - Rs 12900/ at Upper End
Fresh Issue - Aggregating up to Rs 8300 cr
Offer for Sale - Aggregating up to Rs 10000 cr
Objective of the Issue
The payment services provider is going to utilise net proceeds from its fresh issue for growing and strengthening Paytm ecosystem, including through acquisition and retention of consumers and merchants and providing them with greater access to technology and financial services (Rs 4,300 crore).
The fresh issue funds will also be used for new business initiatives, acquisitions and strategic partnerships (Rs 2,000 crore), besides general corporate purposes.
Who are Selling in IPO
Founder Vijay Shekhar Sharma will sell Rs 402.65 crore worth of shares through OFS. Among investors, Antfin (Netherlands) Holding B.V. will sell up to Rs 4,704.43 crore worth of shares, Alibaba.com Singapore E-Commerce will offload Rs 784.82 crore of shares, SVF Panther (Cayman) Rs 1,689.03 crore, and BH International Holdings will sell Rs 301.77 crore worth of shares via OFS.
Elevation Capital V FII Holdings and Elevation Capital V are going to offload Rs 75.02 crore and Rs 64.01 crore worth of shares, while SAIF III Mauritius Company, and SAIF Partners India IV will sell Rs 1,327.65 crore and Rs 563.63 crore worth of shares via OFS.
Other selling shareholders - Mountain Capital Fund L.P., RNT Associates, DG PTM LP, Ravi Datla, Amit Khanna, Prakhar Srivastava, Saurabh Sharma, Manas Bisht, Sanjay S Wadhwa, SasiRaman Venkatesan, N Ramkumar and Abhay Sharma - will offload Rs 86.98 crore of shares.
One 97 is a professionally managed company and so does not have an identifiable promoter. Antfin (Netherlands) Holding B.V. is the largest shareholder in the company with 27.9 percent stake, followed by SVF India Holdings (Cayman) with 17.3 percent stake, SAIF III Mauritius Company (11.4 percent), founder Vijay Shekhar Sharma (9.1 percent), and Alibaba.Com Singapore E-Commerce (6.8 percent).
Vijay Shekhar Sharma is the Managing Director and Chief Executive Officer of the company, and the Chairman of the board. Douglas Feagin is the Non-Executive Director (nominee of Antfin (Netherlands) Holding B.V.).
Munish Varma is the Non-Executive Director (nominee of SVF), and Ravi Chandra Adusumalli is the Non-Executive Director (nominee of SAIF and Elevation Capital, collectively).
Mark Schwartz, Pallavi Shardul Shroff, Ashit Lilani, and Neeraj Arora are Independent Directors on the board.
Incorporated in 2000, One97 Communications launched Paytm in 2009, the India's leading digital ecosystem for consumers and merchants. It is a 'mobile-first' digital payments platform to enable cashless payments for Indians. It is the largest payments platform in India based on the number of consumers, merchants, transactions and revenue as of March 2021, according to RedSeer.
The company offered payment services, commerce and cloud services, and financial services to 337 million registered consumers and over 21.8 million registered merchants, as of June 2021.
It provides consumers a wide selection of payment options on the Paytm app including Paytm payment instruments (which allow them to use digital wallets, sub-wallets, bank accounts, buy-now-pay-later and wealth management accounts), and major third-party instruments (such as debit and credit cards and net banking). The company also helps merchants to acquire and retain customers, and create demand, by offering services like selling tickets to customers, advertising, mini-app listings, channel and loyalty solutions.
Digital Payment - New Growth Engine
Digital payments in India has been evolving rapidly. Unique online transacting users, transacting for services such as online banking, mobile top-ups, in-store payments etc. are expected to grow from 250-300 million in FY21 to 700-750 million by FY26.
With increasing smartphone penetration and internet usage, and the proliferation of digital products and services for consumers, India’s digital ecosystem is at an inflection point. Overall digital commerce (including e-commerce, e-recharges and bill payments) in India is expected to grow over 3.3 times in the next five years to more than $300 billion in FY26 from approximately $90 billion in FY21, according to RedSeer.
(Fig in Rs cr) FY20 FY21
Revenue +3541 +3187
PAT -2942 -1701
Financial does not support the valuation but its hope and the high growth that in terms of Gross Value of Merchandise that company sells every year that is creating the euphoria.
Valuation remains very steep. For this valuation to sustain Paytm should remain on high growth trajectory for atleast 4-5 years.