Market debut: Paytm to raise Rs 12,000 crore via fresh equity

Paytm aims to go public by November this year and could file the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) as early as next month.

Leading payments platform, Paytm will seek shareholders’ nod to raise up to Rs 12,000 crore ($1.6 billion) through fresh issue of equity shares in its forthcoming initial public offering, which is set to be the country’s largest so far. This, along with other items is on the agenda of the company’s extraordinary general meeting scheduled to be held in the Capital on July 12. The company in its EGM notice also said that there will be an offer for sale of equity shares by existing shareholders of the firm.

The EGM will also consider declassifying founder Vijay Shekhar Sharma from his status as a promoter of the company. Sharma is understood to have written to the board on declassification of his status as a promoter. The move may ease his compliance requirements and obligations, according to reports.

“The founder letter further highlights that the founder currently holds 9,051,624 equity shares of the company amounting to 14.61% of the total paid-up equity share capital of company on a fully-diluted basis, and can exercise any control over the affairs or the decision-making process of the company only to the extent of his shareholding. The total paid-up equity share capital of company is broadly held by various institutional investors, employees, ex-employees and other third parties and currently the company has an aggregate of over 1,000 shareholders,” according to the EGM note.

In the beginning of the month, Paytm had asked its employees if they would like to sell their shares as part of the IPO.

Paytm aims to go public by November this year and could file the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) as early as next month.

SoftBank Group, Berkshire Hathaway and Ant Group are Paytm’s shareholders.

The digital payment firm’s revenue from operations declined to Rs 2,802.41 crore on a consolidated basis in the year ended March 31, 2021, from Rs 3,280.84 crore in FY20, according to the company’s annual report. Total losses, however, narrowed to Rs 1,701.01 crore in FY21 from Rs 2,942.36 crore in the previous year as the firm managed to keep a check on its costs. The company’s total expenses decreased to Rs 4,782.95 crore in FY21 from Rs 6,138.23 crore in FY20.