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Digital payments giant Paytm, one of India’s most valuable startups, plans to raise up to $ 2.2 billion in an initial public offering, he said on Friday in documents submitted to the country’s market regulator.
The Noida-based company – backed by Alibaba (which alongside Ant Financial owns 36% of Paytm), Berkshire Hathaway and SoftBank (owns around 18% stake) among others – said (PDF) that it will issue new shares worth $ 1.1 billion and offer a sale value of $ 1.1 billion.
Paytm, which until recently was India’s most valuable startup, said it could raise up to $ 268 million in a pre-IPO cycle. TechCrunch reported earlier this month that Paytm had held talks with Goldman Sachs and Fidelity to initiate a pre-IPO round.
The startup, which competes with PhonePe and Google Pay in the world’s second largest internet market, plans to use the new $ 577 million capital to expand its payment service offering and around $ 269 million to launch. new initiatives and explore acquisition opportunities, he said. .
Paytm, which was launched in 2009 to help users easily make digital payments from their phones and top up credit, has expanded to a wide range of services over the past decade. Today, it operates a payment gateway, e-commerce marketplace, ticket booking and also sells insurance and digital gold. In many of the categories in which it operates, Paytm is a market leader.
The startup platform, formerly known as One97 Communications and last valued at $ 16 billion, has garnered more than 333 million users, including 114.3 million annual transactions, and has integrated over than 21 million traders, she told newspapers today.
Paytm, led by Vijay Shekhar Sharma, describes himself as having “created a payments-based superapplication, through which we provide our consumers with innovative and intuitive digital products and services.” 
A look at the Paytm figures shared with the market regulator on Friday. Image credits: Paytm “We offer our consumers a wide selection of payment options on the Paytm app, which include (i) Paytm payment instruments, which allow them to use digital wallets, sub-wallets, bank accounts , buy now, pay later and wealth management accounts and (ii) major third party instruments, such as debit and credit cards and net banking ”,
Paytm’s IPO plans come at a time when the pandemic has fueled India’s digital economy and local stock exchanges are showing a growing appetite for mainstream tech stocks. Indian food delivery giant Zomato’s $ 1.3 billion IPO this week took only hours to be fully subscribed by retail and anchor investors.
Much hinges on a successful IPO by Paytm, one of India’s most famous startups. It reported a consolidated loss of $ 233.6 million for the fiscal year ended March 2021, up from $ 404 million in 2020.
Earlier this week, Sequoia-backed Paytm rival MobiKwik also filed for an IPO, in which it seeks to raise around $ 250 million. Flipkart, the SoftBank-backed e-commerce giant that raised $ 3.6 billion at a valuation of $ 37.6 billion earlier this week, insurance aggregator PolicyBazaar, makeup retailer Nykaa and the Delivery startup Delhivery, which announced a $ 100 million investment from FedEx on Friday, could also feature in the next three to four quarters.
An overview of all Paytm companies. Image credits: Bernstein
Bankers and analysts are bullish on Paytm, whose mobile wallet business has lost its luster in recent years as UPI – a bank-backed payments framework in India – found takers in Google, PhonePe and others and stormed the market. But Paytm has rebounded, analysts say.
“With the advent of the UPI, there has been a growing narrative that has called into question Paytm’s leadership in the market,” analysts wrote, referring to the exponential growth of the payment stack developed by companies. retail banks in India which has been adopted by several companies including Google and PhonePe. (as well as Paytm), and which has somewhat reduced the appeal of mobile wallets in India, ”analysts at Bernstein wrote in a recent report to clients.
“However, under the hood, Paytm is the leader in merchant payments and has built an ecosystem of synergistic fintech sectors around its“ superapplication. ”The ecosystem covers payments (wallet / UPI), acquiring a full suite of merchants, credit technology, digital banking, wealth management and insurance technology. We believe that the superapplications battle in India is not a ‘winner takes all’ but a game of execution, business development and creating a superior customer experience with ecosystem integration, ”added analysts at Bernstein.
That said, there are certain risk factors that retail investors should keep in mind. In today’s filing, Paytm said it was a “foreign owned and controlled” company and would continue to own this property after the IPO and would be therefore subject to Indian laws on foreign investment.
Paytm also said its wealth vertical – Paytm Money – had observed “certain violations” of laws and regulations in the past. And some of the company’s biggest investors plan to sell their stake during the IPO.
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