Digital financial services firm Paytm has received market regulator SEBI’s nod for an initial public offer of Rs 16,600 crore, a source involved in the process said on Friday. The company is expected to hit the stock market by the end of this month and is planning to fast-track listing by skipping the pre-IPO share sale round.
“Sebi has approved Paytm’s IPO,” the source said on condition of anonymity.
The source said the company’s plan to halt pre-IPO growth is not related to any valuation gap.
If the proposed IPO is successful, it will be the biggest such offer. Coal India’s initial public offering (IPO) of Rs 15,200 crore in 2010 is the largest ever public offering in the country.
Paytm is looking at a valuation of Rs 1.47-1.78 lakh crore.
US-based valuation expert Ashwath Damodaran, a professor specializing in finance at the Stern School of Business at New York University, has valued the firm’s unlisted shares at Rs 2,950 per share.
According to the draft IPO, the company plans to raise Rs 8,300 crore through fresh issue of equity shares and Rs 8,300 crore through offer for sale.
Paytm founder, managing director and chief executive Vijay Shekhar Sharma and Alibaba group companies will reduce some of their stake in the proposed sale proposal.
According to a source, Alibaba Group firm Antfin (Netherlands) Holding BV is expected to sell at least 5 per cent stake to bring down its stake below 25 per cent to comply with regulatory requirements.
According to the documents, investors who sold stake include Antfin (Netherlands) Holding BV (which holds 29.6 per cent), Alibaba.com Singapore E-Commerce (7.2 per cent) and Elevation Capital V FII Holdings (0.7 per cent).
In addition, there will be Elevation Capital V (which holds 0.6 per cent), SAIF III Mauritius Company (12.1 per cent), SAIF Partners India IV (5.1 per cent), SVF Panther (Cayman) (1.3 per cent) and BH International Holdings (2.8 per cent). . Also sell stake.
The company proposes to use Rs 4,300 crore to grow and strengthen the Paytm ecosystem, including acquisition of consumers and merchants and giving them greater access to technology and financial services.
Paytm plans to earmark Rs 2,000 crore for business initiatives, acquisitions and strategic partnerships and up to 25 per cent of the total funds raised through IPOs for general corporate purposes.
According to the documents, Paytm’s merchant base grew from 1.12 crore in March 2019 to 2.11 crore as on March 31, 2021, and the Gross Merchant Value (GMV) in the financial year (FY) nearly doubled from Rs 2.29 to over Rs 4 lakh crore Done. lakh crore in the financial year 2019
The company has reported net loss of Rs 1,704 crore in FY 2011, Rs 2,943.3 crore in FY 2010 and Rs 4,235.5 crore in FY 2019.
Total income declined to Rs 3,186.8 crore in FY2011 from Rs 3,540.7 crore in FY10.
Paytm has reported negative cash flow of Rs 222.1 crore in FY 2011 mainly due to operating losses and additional working capital requirement.