The digital payments industry has grown by leaps and bounds due to the pandemic, which forced people to go online. Among the firms that have benefitted from this unprecedented surge the most is Paytm, one of the highest valued Indian technology companies and the country’s leading digital payments provider. On Thursday, Paytm made the headlines for a different reason, after Bloomberg reported that the payments giant was aiming to raise about ₹21,800 crores ($3 billion) in an initial public offering late this year, in what could be the country’s largest debut ever.
If the company goes through with the IPO in November (thus coinciding with Diwali), and is successful, it would go down as the largest IPO in India to date, displacing Coal India Limited’s IPO of ₹15,000 crores in 2010 from the top position.
Paytm’s investors include Berkshire Hathaway Inc., SoftBank Group Corp., and Ant Group Co. The firm is now said to target a valuation of around $25-30 billion. It has already appointed investment banks and lawyers to start working on its IPO, the report said.
“The company has appointed law firm Khaitan to start work on its proposed IPO. Khaitan will act as the main legal counsel for the company for the IPO. A few other law firms have also been hired to represent the investors in the company. These are early days for the IPO process and the exact details of the share sale, how much the company will raise for its growth and which investors will sell shares and how much, is still to be worked out,” a person told Bloomberg. .
Investment banks Morgan Stanley, Citibank, and JP Morgan have been brought on board to manage the IPO, and the process could start from late June or early July.
With over 20 million merchant partners and 1.4 billion monthly transactions, Vijay Sekhar Sharma’s Paytm is the leading player in the digital payments market, competing against Google Pay, Amazon Pay, PhonePe, and other players in a massively competitive market. It provides services like banking, credit cards, financial services, wealth management, and digital wallets, while also supporting India’s financial payments backbone, the Unified Payments Interface or UPI. In recent times, its focus has been on increasing its revenue and monetizing services as it had its best-ever quarter in Q1 2021.
In going for a domestic IPO, Paytm joins Zomato, CarTrade, PolicyBazaar, and Mobikwik, who are also looking forward to domestic IPOs this year. The listing will include new and existing shares to ensure that it complies with India’s regulatory requirement for 10% shares to be floated within two years and 25% within five years.