Paytm IPO: Rs 18,300 Cr, India's Biggest Public Offer Opens Today; Should you Apply?

Paytm IPO Opens Today: Paytm’s parent company One97 Communications is all set to lauch its mega initial public offering (IPO) on Monday, November 8. The leading financial services and solutions company will is planning to raise a whopping Rs 18,300 crore from its maiden offer. Paytm IPO will be the largest public offering in India so far. Incorporated in 2000, One97 Communications is India’s leading digital ecosystem for consumers and merchants. It offers a range of services to the users — payment services, commerce and cloud Services, and financial services. It has played a major role behind India’s cashless economy in the last few years.

Paytm IPO Price, Issue Size, Offer Details

Paytm IPO will be open for subscription from November 1-3. The price band has been fixed at Rs 2,080 – 2,150 per share. The minimum bid lot size has been fixed as 6 equity shares and in multiples of 6 shares thereafter. Hence, retail investors can invest a minimum of Rs 12,900 for a single lot. The maximum investment for them would be Rs 1,93,500 for 15 lots. The company will set aside 75 per cent of the offer for qualified institutional buyers, 15 per cent for non-institutional investors, and the remaining 10 percent is for retail investors.

Paytm IPO Offer Details:

The offer will be a combination of fresh issue of Rs 8,300 crore and an offer for sale of Rs 10,000 crore by selling shareholders including founder and investors.

Founder Vijay Shekhar Sharma will sell Rs 402.65 crore worth of shares through OFS. Among investors, Antfin (Netherlands) Holding B.V. will offload up to Rs 4,704.43 crore worth of shares, Alibaba.com Singapore E-Commerce will sell up to 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. 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.

Paytm IPO Anchor Investors

Paytm raised raised ₹8,235 crore from 122 anchor investors by allocating 3.83 crore shares at ₹2,150 a share. BlackRock Global Funds — through World Technology Fund (40.38 lakh shares) and World Financial Fund (6.376 lakh shares) – have garnered 12.2 per cent of the total anchor portion. CPPIB has been allotted about 43.62 lakh shares (11.4 per cent). Other anchor investors were Aditya Birla Sun Life Trustee, Government of Singapore, Vanguard, Schroder International Selection Fund, Sands Capital Funds, Mirae Asset, Marshall Wace Investment Strategies, Fidelity, UBS, Janus Henderson, Nomura India Investment Fund, HDFC Mutual Fund, Morgan Stanley Asia (Singapore), Goldman Sachs (Singapore), Fidelity, Master Trust Bank of Japan, Janus Henderson, Aberdeen, Societe Generalle and BNP Paribas.

Paytm IPO: Objectives of Issue

The company 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 . The fresh issue fund will also be used for new business initiatives, acquisitions and strategic partnerships and general corporate purposes. The portion from OFS will go to selling shareholders.

Paytm IPO Valuation

“At higher price band of Rs. 2,150, it is demanding an EV/Sales multiple of 46.1x, which seems to be stretched. The demanded valuation is also at significant premium to China’s Ant Group proposed IPO in 2020. Thus considering the growth potential and stretched valuations, we assign “subscribe for long term” rating for the issue,” said Choice Broking.

“There is a large section of population who are underserved in payments and financial services products. Also there is vast population of small businesses, which have not witnessed the benefits of digital commerce. Thus One97 Communications Ltd has a large addressable market to serve,” the brokerage said,

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