Paytm's Rs 16,600 cr IPO gets Sebi nod, listing likely in November: sources

One97 Communications, the parent of Paytm, has received the Securities and Exchange Board’s (Sebi’s) nod for its Rs 16,600-crore initial public offering (IPO).

The firm is likely to launch the offer in November, said sources aware of the development. The IPO is touted to be the biggest ever in the country, surpassing the Rs 15,000 crore raised by government-owned Coal India in 2010. The IPO comprises a fresh issue of equity shares of Rs 8,300 crore and an offer for sale (OFS) by existing shareholders of Rs 8,300 crore. 

According to the Draft Red Herring Prospectus (DRHP), shareholders Ant Financial, Alibaba, Elevation Capital V, Saif III Mauritius, Svf Panther (Cayman) and Bh International Holdings are all looking to offload some portion of their shares through the OFS. Paytm filed its DRHP with Sebi in July. Sources said not much has changed from the initial DRHP.

The company has proposed to use Rs 4,300 crore for growing and strengthening the Paytm ecosystem, including through acquisition of consumers and merchants and providing them with greater access to technology and financial services, PTI reported.

Paytm plans to earmark Rs 2,000 crore for business initiatives, acquisitions and strategic partnerships and up to 25 per cent of the total fund raised through the IPO for general corporate purposes, according to PTI.  

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.

Its revenues from operations in FY21 stood at Rs 2,800 crore from 114 million annual transacting users and had facilitated 7.4 billion transactions, including transactions made to merchants via its ecosystem.