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Decoding Paytm’s Cap Table: Who Owns How Much Of IPO-Bound One97 Communications

Decoding Paytm’s Cap Table: Who Owns How Much Of IPO-Bound One97 Communications

Paytm intends to offer shares worth INR 16,600 Cr in the IPO of which half will be through a fresh issue and the other half via selling existing shareholdings

CEO Vijay Shekhar Sharma, Ant Financial, Alibaba, Berkshire Hathaway, Elevation Capital (through the earlier funds of its erstwhile avatar of SAIF Partners) will sell portions of their stakes in the fintech behemoth

The company plans to invest IN 4,300 Cr from the IPO proceeds to growing and strengthening its ecosystem, including through acquisition and retention of consumers and merchants

All the major shareholders of Paytm, including founder and CEO Vijay Shekhar Sharma, Ant Financial, Alibaba, Berkshire Hathaway, Elevation Capital (through the earlier funds of its erstwhile avatar of SAIF Partners), will sell portions of their stakes in the fintech behemoth in the company’s upcoming public listing.

According to Paytm’s draft red herring prospectus (DRHP) filed with capital markets regulator SEBI on Friday (July 16), the company intends to offer shares worth INR 16,600 Cr in the initial public offering (IPO). While INR 8,300 Cr or half of this will be accounted for by a fresh issue of shares, existing shareholders will sell the same amount of shares in the IPO. The DRHP also says that the size of the issue may be reduced if Paytm raises INR 2,000 Cr in a pre-IPO round as being planned by the company.

Interestingly, Paytm is planning to list as a professionally managed company rather than as one managed by promoters, according to media reports. This means that Ant Financial, which has a 29.6% shareholding in the company will have to sell at least 4.6% of its stake. Ant is a part of the Jack Ma-led Alibaba Group which also has another 7.2% shareholding in paytm through one of its ecommerce arms.

The other major shareholders in the company are SoftBank which owns 19.6% through its two funds; Elevation Capital (formerly SAIF Partners) which owns 17.2%; Vijay Shekhar Sharma and and his namesake VSS Holding Trust have 9.6% and 5% stakes, respectively; and Warren Buffet’s Berkshire Hathaway owns 2.8%.

Decoding Paytm's Cap Table: Who Owns How Much Of IPO-Bound One97 Communications

How Paytm Plans To Invest IPO Proceeds

The company plans to invest IN 4,300 Cr from the IPO proceeds to growing and strengthening its ecosystem, including through acquisition and retention of consumers and merchants and providing them with “greater access to technology and financial services”, said the company. It will also invest INR 2,000 Cr towards new business initiatives, acquisitions and strategic partnerships.

Paytm had clocked revenue of INR3,186 Cr for FY21 vs INR 3,540 Cr in FY20 It narrowed losses to INR 1,701 Cr during the same period from INR 2,942 Cr in the previous year.

Ahead of its initial public offering (IPO) Jing Xiandong of Ant Group has exited One97’s board and is being replaced by Douglas Lehman Feagin, as per filings with the registrar of companies (ROC). Feagin is the senior vice president of Ant Group and is based out of the US.

One97 Communications operates Paytm Payments Bank Limited, Paytm General Insurance Limited, Paytm Life Insurance Limited, Paytm Money Limited, Paytm E-Commerce Private Limited, Paytm Entertainment Limited among other smaller entities. These combine to give Paytm a strong acquisition channel for its core business of payments and fintech services.

The company recently elevated a few of its executives to key leadership roles in line with its IPO ambitions. 

This will also be India’s biggest public issue so far after Coal India, which raised INR 15,000 Cr.