Paytm Eyes India's Largest Debut $3Bn IPO

By siliconindia  |  Thursday, 27 May 2021, 03:30:49 PM IST

Paytm Eyes India's Largest Debut $3Bn IPO

India’s leading digital payments provider Paytm is targeting to raise nearly 21,800 crore ($3 billion) in an initial public offering late this year, according to sources close to firm, in what could be India’s largest debut ever.

The startup, backed by investors comprising Berkshire Hathaway Inc, SoftBank Group Corp and Ant Group Co, plans to list in India around November and its offering could concur with the Diwali festival season, states the anonymous person, because the details are private. Paytm, officially called One97 Communications, is aiming a valuation of around $25 billion to $30 billion.

The One97 board intends to meet tomorrow to formally approve the IPO. If successful, Paytm’s initial share sale would surpass Coal India’s offering, which gathered more than 15,000 crore in 2010 in the country’s largest IPO so far.

Banks shortlisted to run the Paytm offering include Morgan Stanley, Citigroup Inc and JPMorgan Chase & Co, with Morgan Stanley the leading contender, according to sources. The process is expected to get rolling in late June or early July. The banks did not immediately respond to requests for comment.

The public market debut will include a mix of new and existing shares to meet regulatory obligations in India. The country’s regulations require that 10% of shares are floated within two years and 25 percent within five years.

Paytm, led by founder and chief executive officer Vijay Shekhar Sharma, has been focusing on ramping up revenue and monetizing its services over the past year. It’s expanded beyond digital payments into banking, credit cards, financial services, wealth management and digital wallets. It also supports India’s financial payments backbone, the Unified Payments Interface or UPI.

Paytm has fended off stiff competition from a swath of global players including Google Pay, Walmart Inc-owned PhonePe, Amazon Pay as well as Facebook Inc-owned WhatsApp Pay. It has the biggest market share of India’s merchant payments.

Paytm has more than 20 million merchant partners and its users make 1.4 billion monthly transactions, according to numbers in a recent company blog post.

In a recent conversation, CEO Sharma said Paytm had its best ever quarter in the first three months of this year after pandemic-related spending spurred digital payments.

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