SEBI Asks Fintech Unicorn PayMate India To Refile DRHP

Markets regulator SEBI has asked Mumbai-based fintech unicorn PayMate India to refile its draft red herring prospectus (DRHP) with new updates. The regulator originally returned the DRHP on January 17, 2023. 

PayMate filed its DRHP for an INR 1,500 Cr IPO in May 2022. The IPO will comprise fresh issuance of equity shares worth INR 1,125 Cr and an OFS of INR 375 Cr. 

In a statement, PayMate said that it would be able to submit the mandatory SAR by the second week of February. “Based on the SEBI communication, we have received and following our receipt of in-principle approval from RBI for the payment aggregator (PA) authorisation recently, we will be in a position to submit the mandatory SAR (System Audit Report) by the first or second week of February.”

“We are confident of a quick turnaround by RBI; and thereafter refiling DRHP with relevant updates along with the RBI final approval,” it added. 

Last month, PayMate received in-principle approval from the Reserve Bank of India (RBI) to operate as a PA. Fintech companies have to submit SAR to the central bank to get final approval for the licence. 

The development comes close on the heels of SEBI asking hospitality chain OYO to share an updated DRHP with financial statements of September quarter of FY23. Owing to this, OYO’s IPO is anticipated to get delayed by three months.

As per PayMate’s DRHP, its promoters – Ajay Adiseshan and Vishvanathan Subramanian and investors including Lightbox Ventures I, Mayfield FVCI Ltd, RSP India Fund LLC and IPO Wealth Holdings would be selling their stakes via OFS. 

Cumulatively, PayMate’s promoter and promoter group hold 66.70% share in the startup while the remaining share is held by public shareholders.

In February 2022, Inc42 reported that PayMate converted into a public company, which is an important step toward the IPO. 

Founded in 2006 by Adiseshann, the fintech startup enables organisations to make transactions across a supply chain. It works along with banks to offer credit to small and medium-sized enterprises. 

The startup also offers Procure to Pay (P2P) automation and APIs, which enables businesses to utilise its payment solutions in their enterprise resource planning (ERPs). 

At the time of filing DRHP, the startup had said (in IPO papers) that it would raise an anchor fundraising round, those details were not specified in the papers.

In September 2022, PayMate raised $100 Mn in a pre-IPO funding round.

In the financial year 2021, it reported a net loss of INR 16 Cr and an operating revenue of INR 348 Cr. It clocked a negative EBITDA of INR 14 Cr, as per Tofler data. 

In the fintech segment, a slew of fintech players including Fino Payments Bank, Paytm, MobiKwik, EbixCash and Pine Labs, among others have either listed publicly or in plans to file for IPO.  

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Update| 25th January 2023, 2.30 PM

The story has been updated with the comments of PayMate