paytm: Paytm gets green light from Sebi for Rs 16,600 crore IPO

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MUMBAI: Market regulator Sebi has authorized the initial public offering of Rs 16,600 crore from One97 Communications, the parent company of Paytm. This would make the largest IPO ever in India. The company is reportedly aiming for listing in November.
According to the draft IPO documents filed by the company, One97 Communications plans to increase Rs 8,300 crore through a new issue of shares and another Rs 8,300 crore via the offer for sale route (OFS).

The Rs 16,600 crore offer will make Paytm the largest IPO after the Rs 15,990 crore IPO of public sector miner Coal India in 2010 and Reliance Power in 2008. The IPO Zomato’s Rs 9,375 crore this year was the largest public offering in over a decade. The success of Zomato’s IPO has raised hope for new age companies that focus more on growth than bottom line. One97 Communications reported a loss of Rs1,704 crore in FY21, down 42% from the previous year. Existing shareholders, which include the ANT group and the most important employees, will sell a stake in the OFS category. SoftBank, Elevation Capital, SAIF Partners, Berkshire Hathaway and Ratan Tata’s RNT Associates are the other investors listed as selling shareholders under the OFS.
The success of the IPO would depend on the support it receives from international investors given the scale of the offer. The company is looking at a valuation of $ 20-22 billion.
If the company succeeds in getting this valuation, it will be in the same league as Tata Steel or Tata Motors with valuations of around Rs 1.6 lakh crore each. Some bankers estimate that the IPO could lead to foreign capital inflows of more than $ 2 billion.
One97 Communications, named after the 197 directory survey number used by public telecommunications operators MTNL and BSNL, was established as a research service in 2001 by Vijay Shekhar Sharma. She used the Paytm brand to get into top-up services.
The company expanded into the digital wallet space and later into QR-based payments. During demonetization, it quickly developed its activity and today holds the largest share of merchant payments in terms of the number of merchants. Paytm Payments Bank (PPB), which is promoted by Sharma and One97 Communications, received a license from the RBI in 2017. PPB has now sought to convert into a small finance bank. Besides PPB, the Paytm group includes Paytm Money. Last year, Paytm signed an agreement to buy Raheja QBE General Insurance.


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