Paytm Targets $3 Billion IPO

Paytm is Planning India’s Biggest IPO Debut

Paytm, the digital payment leader in India is all set to start its public listing in the coming days. But it will not be a normal IPO. As per the latest reports shared by Bloomberg, the fintech startup is on the way to start the biggest Indian IPO debut in history.

Paytm is the second most valued startup in India. Recently, Byju’s took over Paytm to become the most valuable firm in the Indian startup ecosystem. Paytm has strong support from its existing investors including Berkshire Hathaway Inc., SoftBank Group Corp., and Ant Group Co. in the public listing.

An insider person told Bloomberg that Paytm listing may take place in November month of 2021. That will also be Diwali time in India. Diwali festival is considered the most auspicious occasion to invest in the Hindu community. Paytm, formally called One97 Communications Ltd., is targeting a valuation of around $25 billion to $30 billion.

Related to internal IPO approval, The One97 team will be having a meeting on Friday. When contacted, Paytm did not comment anything on the scheduled meeting or IPO plans.

Up to now, Coal India Ltd has the largest public offering of Rs 150 billion in 2010.

Paytm IPO and the Road Ahead for Indian Startups

For Paytm public offering, Morgan Stanley, Citigroup Inc., and JPMorgan Chase & Co. are shortlisted by the firm. As per the internal report, Morgan Stanley may win the race against other banks. All three banks did not comment on anything when they were contacted by different media portals.

The public market debut will include a mix of new and existing shares to meet regulatory obligations in India. The country’s regulations require that 10% of shares are floated within two years and 25% within five years.

Karan Sharma, co-head of the digital and technology investment banking practice at Mumbai-based Avendus Capital Pvt supported the tech firms’ IPO and said that firms like Paytm will be in strong demand. He also gave the example of Apple and Amazon about how their IPO became so successful due to tech-based products.

He said:

“The market capitalization of companies listed on BSE has topped $3 trillion, but there are hardly any listed Internet companies in which investors can partake.”

He further talked about the Bombay Stock Exchange’s popularity among international investors.

He said:

“There’s also massive latent demand from global investors who have large allocations for emerging markets.”

Paytm founder and Chief Executive Officer Vijay Shekhar Sharma talked about the first quarter report of Paytm. And he revealed that the company earned a hefty revenue in Q1 of 2021.

He also accepted that Paytm has stiff competition with Google Pay, Amazon Pay, PhonePe, etc. He also praised the Indian startup ecosystem and said that more firms will start public offerings in the future.

Sharma of Avendus said:

“Many of these companies are seeing 50 to 60% growth annually, are profitable. The market is waiting for these companies to go public.”

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