Paytm IPO: Fintech Decacorn To Raise $1.1 Bn From Anchor Investors

IPO bound Paytm is in talks of raising $1.1 Bn (INR 8,250 Cr) in one of the largest IPO anchor round. The fintech giant is in talks with blue-chip global tech funds for this round which is expected to close by November 3rd.

World’s top pension funds, long-only funds and sovereign wealth funds like Blackrock, CPPIB and GIC have lined up for the mega IPO, an Inc42 source said.

Paytm is set to raise INR 18,300 Cr from the markets through a fresh issue of INR 8,300 Cr and an offer for sale of INR 10,000 Cr.

The fintech giant will open for subscription on November 8th at a price band of INR 2080-2150. And has pegged the valuation at $20 Bn.

During a pre-IPO press conference last week, Madhur Deora, President and Group CFO, Paytm, said that the valuation, which has been pegged at $19.5 Bn – $20 Bn, could have been done at a higher valuation, but the company does not “believe in getting every last dollar of valuation”.

As per reports, the company is aiming for a mid-November listing.

As per its RHP filing, Paytm’s total user base stands at 337 Mn customers and 21.8 Mn merchants, as of June 30, 2021. The fintech decacorn’s GMV has increased from INR 697 Vb in the three months ended June 30, 2020, to INR 1,469 Bn in the three months ended June 30, 2021.

Its revenue from operations is up by 62% YoY while its contribution margin positive is up by 85% YoY for Q1FY22, according to its RHP filing. Payments and financial services alone contribute to almost 80% of its revenue.

During the first quarter of FY22, its net loss increased to INR 381.9 Cr, from INR 284.4 Cr during the corresponding quarter of FY21. The increase in losses comes largely on the back of a 40.6% year-on-year (YoY) surge in its expenses to INR 1,312.3 Cr in April-June this fiscal.

Interestingly, Paytm’s contribution margin also rose significantly to 27.4% in Q1FY22, up from 14.9% in Q1FY21.