Paytm Raises INR 920 Cr From Swiss Re For Its Insurance Business

SUMMARY

Paytm Insuretech has already received INR 397 Cr from Swiss Re and the remaining amount will soon be infused

The latest investment along with Paytm Insuretech acquiring Raheja QBE are subject to regulatory approval

Paytm is likely to lists on stock exchange in the next week of Diwali

IPO-bound Paytm’s insurance aggregator Paytm Insurtech is raising INR 920 Cr from one of the world’s largest insurance providers Swiss Re. Paytm Insurtech has already received INR 397 Cr, and the remaining amount will be infused later for a 23% stake on a fully diluted basis.

Paytm founder and chairman Vijay Shekhar Sharma called the strategic investment with Swiss Re an important milestone in their financial services journey.

“We look forward to gaining from Swiss Re’s global insurance capabilities and building innovative products to tap into the Indian market,” he added.

The latest development comes days after Paytm Insurtech acquired Raheja QBE by Paytm Insurtech Pvt. Ltd. The investment by Swiss Re and the acquisition of Raheja QBE by Paytm Insuretech is subject to regulatory approvals.

Paytm is heading for the country’s largest initial public offering, where it is eyeing to raise INR 16,600 Cr from the public market at a valuation of $20 Bn.

The company has just received market regulator – SEBI’s approval for its IPO. According to media reports, the company is further eyeing to increase its IPO offer by INR 1,700 Cr, thus taking the IPO offer to a record INR 18,300 Cr.

The fintech unicorn is likely to raise its offer-for-sale, meaning existing shareholders selling their shares from existing INR 8,300 Cr as per the DRHP filed with the SEBI to INR 10,000 Cr.

According to an ET report, China’s Ant Financial, Paytm’s largest stakeholder (with 29.6% stake), is likely to offload around INR 5,000 Cr of equity shares, thus bringing down its holding to 25% in the fintech decacorn.

The company is likely to list itself on the stock exchange around Diwali.

As per the DRHP filing, Paytm had clocked revenue of INR 3,186 Cr in FY21 vs INR 3,540 Cr in FY20. Over the years, the fintech unicorn has narrowed losses to the tune of INR (4,235.5) Cr, INR (2,943.3) Cr and INR (1,704) Cr in FY19, FY20 and FY21, respectively.

The fintech unicorn plans to utilise the proceeds from the IPO to strengthen its ecosystem and the acquisition and retention of customers and merchants.

The fintech giant, after filings its DRHP with the market regulator, had increased its employee stock option plan (ESOP) pool from a little over 24 Mn to 61 Mn, a 2.5X increase. The startup has already seen around 320 existing, and former employees convert their ESOPs into shares worth INR 529 Cr.