US Based T Rowe Marks Up IPO Bound Paytm’s Shares By Over 16%

Paytm’s Ex & Current Employees Convert ESOP Shares Worth INR 182 Cr

SUMMARY

For the quarter ending March 2021, December 2020 and September 2020, Paytm shares were valued at around $255 a piece

This valuation by T Rowe comes after Paytm saw its overall revenue take a hit amid the pandemic as it fell 9.9% from INR 3,540.77 in FY20 to INR 3,186.8 in FY21 on a consolidated basis

In August, 2021, Vanguard had revised the valuations of its shares in Ola by nearly 50%

US Investment management firm T Rowe has marked up Vijay Shekhar Sharma led Paytm’s shares by over 16% from the original acquired price.

For the quarter ending March 2021, December 2020 and September 2020, Paytm shares were valued at around $255, recovering from the significant markdown in the June quarter last year.

On the other hand, for the quarter ending in June 2021, at least two mutual funds priced the fintech giant’s shares at $295 apiece compared to the original $254. This is approximately a 57% increase compared to the valuation in the year-ago quarter, when shares were marked down to $188.

On the verge of a $3 Bn initial public offering, the fintech behemoth’s losses narrowed 42% to INR 1,704.01 Cr from INR 2,943.32 Cr in FY21. However, the company still saw its overall revenue take a hit amid the pandemic as it fell 9.9% from INR 3,540.77 in FY20 to INR 3,186.8 in FY21 on a consolidated basis.

Additionally, Paytm managed to lower its expenses from INR 6,138.23 Cr in FY20 to INR 4,782.95 Cr in FY21, the company’s annual financials showed. While Paytm spent a staggering INR 1,397.05 Cr in marketing in the financial year ending March 2020, the digital payments company tamped down its marketing spend by 62% to INR 532.32 Cr amid the pandemic as digital adoption went up.

T Rowe had led Paytm’s $1 Bn round in November 2019, along with the participation of Ant Group, SoftBank Vision Fund and Discovery Capital. The round had valued the company at $16 Bn.

The firm is said to have invested at least $150 Mn in Paytm in December 2019 and had acquired shares for $254 each.

In the past, several Indian startups such as Flipkart and Ola have seen their valuations revised. For instance, Vanguard had revised the valuations of its shares in Ola by nearly 50% as of August 31, 2020. Ola’s shares were being valued at $162.5 each by the company against $311 per share value accessed in February. This was primarily due to fall in Ola’s revenues and business during the pandemic and the resultant lockdown.