It's a season of tech IPOs. Just as the initial public offering of food delivery company Zomato closes for subscription on Friday, another technology giant has filed its draft papers to go public. One97 Communications, the promoter of fintech firm Paytm, plans to raise Rs 16,600 crore through the IPO.
The share sale will include a fresh issue of Rs 8,300 crore while existing shareholders will sell Rs 8,300 crore worth stock through an offer for sale.
From the proceeds from the fresh issue, Paytm estimates around Rs 4,300 crore will be used towards growing and strengthening the Paytm ecosystem including through the acquisition of consumers and merchants and providing them with greater access to technology and financial services.
Up to Rs 2,000 crore have also been earmarked for investing in new business initiatives, acquisitions and strategic partnerships, as per the draft prospectus.
ANT Financial continues to be the largest shareholder; Antfin (Netherlands) Holding has a 29.6 per cent stake in Paytm. Among other major investors, Softbank Vision Fund holds around 19.6 per cent stake, SAIF India Holdings and SAIF Partners together hold around 17.2 per cent and Alibaba.com holds a 7.2 per cent stake. Promoter Vijay Shekhar Sharma has a 9.6 per cent stake in the company, while Sharma’s VSS Holding Trust has another 5 per cent.
Antfin, Alibaba, Softbank Vision Fund, SAIF Partners and BH International Holdings are among the investors selling shares in the offer for sale.
Paytm started as a mobile wallet, but today its business also includes a payment bank, Paytm Money, a share trading and mutual fund platform, and insurance broking.
“We offer payment services, commerce and cloud services, and financial services to 333 million consumers and over 21.1 million merchants, as of March 31, 2021,” the company said.
A majority of the revenue is derived from the payments service. The ongoing COVID-19 pandemic and measures intended to prevent its spread have had and may continue to have a material and adverse effect on the business, Paytm said.
In the year ended March 31, 2021, the company reported a total income of Rs 3,186.8 crore, compared with Rs 3,540.7 crore in the previous year. It reported a loss of Rs 1,701 crore in 2020-21, which was lower than the Rs 2,942.4 crore loss it reported a year-ago.
