Fintech major Paytm’s parent company One97 Communications has filed its draft red herring prospectus (DRHP) for an initial public offering (IPO) to for raising INR 16,600 Cr
On July 12, shareholders of One97 Communications to this proposal. The offer consists of a fresh issue of INR 8,300 Cr and an Offer For Sale (OFS) worth INR 8,300 Cr. The company has 60.59 Cr equity shares outstanding at present and a total of 104 Cr authorised share capital.
The joint global co-ordinators and book running lead managers for the IPO include Morgan Stanley, Goldman Sachs, Axis Capital, ICICI Securities, JP Morgan, Citigroup Global and HDFC Bank. According to the DRHP, founder Vijay Shekhar Sharma owns 14.6% of the company’s pre-offer equity shares. Sharma will continue to be the Chairman, Managing Director and Chief Executive Officer of the company.
Chinese conglomerate Ant Financials holds 29.6% equity in the company through its Netherland-based subsidiary. Ant Group is likely to sell at least 5% of its stake in the company to bring down its stake to below 25% to comply with norms by Securities and Exchange Board of India (SEBI), for listing as a ‘professionally managed company’, reported ET. Japanese conglomerate Softbank holds 19.6% equity through two separate investments. Saif Partners hold 19.2% equity in the company.
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.