After years of sweat and various digital activities, One97 Communications, the parent company of fintech platform Paytm, finally gets its shot at being listed through an Rs. 16,600 crore IPO, which is one of the biggest offers in the Indian Stock Market to date. On 16th July 2021, Paytm filed the draft prospectus with market regulators SEBI that showed Rs. 8,300 crore as primary share scales while the other Rs. 8,300 will be an offer that existing investors can sell their shares.
With this IPO, Paytm breaks the record of India’s biggest public issue so far, the last recorded biggest IPO being coal India, which raised Rs. 15,475 crore, over a decade ago. According to the draft prospectus, the company has stated Rs. 4,300 crore of the takings will be used for its growth which includes customer and merchant acquisition. While Rs. 2000 crore will be used for new business enterprises, strategic schemes, and business procuring.
Paytm is now India’s second most valuable Internet company, with an estimated value of $16 billion when it raised a billion dollars in 2019 directed by T Rowe Price, Discovery Capital, and D1 Capital.The company spent almost a decade providing VAS (value-added services) to telecom clients. It made its first turn with the launch of a mobile recharge platform in 2010. Until then, customers used to pay cash to offline retailers, to get their phones recharged.
Over 90 percent of Indian telecom users had prepaid connections in India at the time. Ten years later, the market has not changed much. With Sebi’s approval, everything goes in line with Paytm’s plan to become a PMC (Professionally Managed Company). Coming to One97’s attempt to go public, well, in 2010, the company planned to raise a whopping Rs. 120 crore through IPO. But it had to be cancelled due to market volatility.
Coming to the end of the line, Paytm’s IPO can bring a huge to the market, going public at Rs. 16,600 crore, it would beat ed-tech firm Byju’s Rs. 16000 crore, the country’s most valuable private Internet company. With Zomato’s IPO opened for subscription earlier this month, Paytm can bring a huge-scale difference in the market. It has set the stage for many other companies like Policybazaar, Nykaa, and Mobikwik to file their drafts in the hopes of a positive response from the market and investors.