Paytm files DRHP for Rs 16,600-cr IPO; fresh issue size at Rs 8,300 cr

Ant Financial, Alibaba, Elevation Capital V, Saif III Mauritius, Svf Panther (Cayman) and Bh International Holdings are looking to offload some part of their shares through the OFS

One97 Communications, the parent of Paytm, filed its DRHP on Friday with the market regulator, Securities and Exchange Board of India (Sebi), for an aggregate offer size of Rs 16,600 crore via an Initial Public Offering (IPO).

The issue comprises a fresh issue of equity shares of face value of Rs 1 each aggregating to Rs 8,300 crore and an Offer For Sale (OFS) by the existing shareholders, aggregating to Rs 8,300 crore. The company also retains the option to undertake a pre-IPO placement of Rs 2,000 crore, subject to relevant approvals. If the pre-IPO placement is completed, the fresh issue size will be reduced to that extent.

According to the DRHP, shareholders Ant Financial, Alibaba, Elevation Capital V, Saif III Mauritius, Svf Panther (Cayman) and Bh International Holdings are all looking to offload some part of their shares through the OFS.

The IPO is being made under rule 19(2)b of the Securities Contracts (Regulation) Rules, 1957, as amended, (the SCRR) and Regulation 31 of the SEBI ICDR Regulations where allocation to QIBs is 75%, NIIs is 15% and RIBs is 10%.

Paytm is India’s leading digital ecosystem for consumers and merchants. The company’s two-sided (consumer and merchant) ecosystem enables commerce, and provides access to financial services, by leveraging technology to improve the lives of consumers and helps merchants grow their businesses.

Paytm was launched in 2009 as a mobile first digital payments platform to enable cashless payments. The company’s financial services businesses i.e mobile banking, lending, insurance, wealth management services were launched recently between 2019 and 2021 and contribute a small percentage to its revenue.

As on March 31, FY21, its revenue from operations stood at Rs 2,800 crore from 114 mn annual transacting users and had facilitated 7.4 billion transactions including transactions made to merchants via its ecosystem and peer to peer payments.

Lead managers appointed to the Issue are Morgan Stanley India Company Private Limited, Goldman Sachs (India) Securities Private Limited, ICICI Securities Limited, Axis Capital Limited, JP Morgan India Private Limited, Citigroup Global Markets India Private Ltd and HDFC Bank Limited.