Mobile Payments Firm Paytm Kicks off India’s Biggest IPO

Paytm, the mobile payment company kicks off India’s largest initial public offering on November 8, 2021. The company is backed by Ant Group, Berkshire Hathaway and SoftBank, that collectively own around a third of the firm.

The company was founded by Mr. Vijay Shekhar Sharma, who has a net worth of ~US$ 2.4 billion and was ranked India’s youngest dollar billionaire four years ago (at the age of 38).

According to the prospectus, Paytm plans to issue fresh shares worth Rs. 83 billion (US$ 1.1 billion), while existing shareholders would sell shares worth US$ 1.34 billion.

The IPO is anticipated to make Paytm India’s most valued tech corporation with a valuation of US$ 20 billion, an increase of 25% from two years ago.

The platform was launched in 2010 and rapidly became a huge digital payments platform in the country. The compnay was also benefited from the government’s initiative to limit the use of cash — including the demonetisation five years ago — and most lately, from the pandemic. The pandemic accelerated the use of digital payments across the country, which also contributed to the growth of firms such as Paytm.

According to the company’s regulatory filing, the platform had 337 million customers at the end of June.

In FY21, the number of mobile payments in India shoot up in the last four years. Paytm undertook transactions worth >US$ 54 billion in FY21.

Further, Motilal Oswal, a Mumbai-based financial analysis firm, estimates that India’s mobile digital payments would exceed US$ 3.1 trillion in value by 2026.

As per the estimates, with the target of US$ 2.46 billion, Paytm would surpass Coal India’s $2 billion issue to become India’s biggest IPO.

Ahead of the offer, last week, Paytm raised Rs. 82.35 billion (US$ 1.11 billion), from 74 anchor investors including BlackRock and the Canada Pension Plan Investment Board.

So far in 2021, Indian firms have raised a record US$ 9.7 billion through IPOs, as per data from market monitor Prime Database.

Until now, Zomato, a food delivery company was India’s biggest IPO of 2021, with its US$ 1.3 billion share issue in July.