Paytm’s Rs 18,300 crore IPO – India’s largest to date – will be open for subscription on November 8, 2021, at a price range of Rs 2,080-2,150 per share of a face value of 1 Rs each. The IPO would reverse the 2010 public offering of state-owned Coal India Ltd, the largest ever. Paytm IPO will close for subscription on November 10. The company increased the size of its IPO from Rs 1,700 crore to Rs 18,300 crore from Rs 16,600 crore, with the increase coming entirely from existing shareholders selling more shares. The public issue includes a new issue of shares valued at Rs 8,300 crore and an offer to sell (OFS) of a maximum of Rs 10,000 crore.
Key IPO officials include Morgan Stanley India Company, Goldman Sachs (India) Securities, Axis Capital, ICICI Securities, JP Morgan India Private Ltd, Citigroup Global Markets India Private Ltd, and HDFC Bank. Link Intime India will be the registrar of the issue. Investors can place bids on a minimum of six stocks and in multiples thereafter. No more than 75 percent of the net issuance will be reserved for Qualified Institutional Investors (QIB), 10 percent for Retail Investors and the remaining 15 percent for Non-Institutional Investors (NII). The weighted average return on equity for the past three years is negative 36.9%. Investors should ensure that the bank account used to bid is linked to their Permanent Account Number (PAN).
There are no listed companies in India that engage in a business similar to that of Paytm. The shares will be listed on the Bombay Stock Exchange and the National Stock Exchange. The company will use the net proceeds for the growth and strengthening of its ecosystem, including the acquisition of customers and merchants worth Rs 4,300 crore, and will invest in new business initiatives, acquisitions and strategic partnerships. valued at Rs 2,000 crore, and for general business purposes.
Digital payments have grown steadily over time, however, India continues to be a cash driven economy. In fiscal year 2021, the digital payments market size by value was approximately US $ 20 trillion with 43 billion transactions in the year. Consumers are quickly turning to digital payments because they offer simple, secure and convenient ways to transfer money between accounts. Likewise, for merchants, the acceptance of payments in digital form has increased dramatically. One of the key examples of changing trends during COVID-19 has been highlighted in Kirana stores across the country. With an increased focus on social distancing, government guidelines discouraging people from relocating for security reasons, merchants have switched to digital payment, resulting in increased payment volumes from digital consumers to merchants. Demonetization in 2016, also played a role in pushing merchants to accept payments digitally and led to the growth of products like QRs and wallets.