Paytm gets approval for Rs 12,000 crore issue

BENGALURU: Paytm’s shareholders have given approval to Rs 12,000-crore fresh issue of shares for listing on domestic stock exchanges, which, as per sources privy to the matter, is slated to happen by November this year.

However, China’s Ali Baba and Ant Financial groups which own a combined 37% shareholding in the financial services company are most likely to participate in a secondary shares sale ahead of the IPO bidding. The move will reduce their stakes below 25% in order to be classified as a professionally managed company under the Securities Exchange Board of India (SEBI) regulations.

Another key investor Softbank is also likely to sell its shares during the forthcoming IPO along with Alibaba and Ant group. The total issue size including the offer for sale by the existing shareholders is estimated to be worth Rs 16,600 crore, the second-largest IPO in India’s domestic markets history after Coal India. Paytm is seeking funds from institutional/ retail investors at $ 25-30 billion valuation, almost double of its current $16 billion valuations.

At the extraordinary general meeting held on Monday, Paytm’s shareholders have also approved of CEO Vijay Shekhar Sharma's de-classification as the promoter of the company since he owns less than 20% stake. Sharma, however, will continue to be Chairman and Managing Director of the company.One97 Communication, which is the parent entity of Paytm had stated in an earlier Registrar of Companies filing that there was a board rejig in the company with Alibaba’s Senior Vice-President Douglas Lehman Feagin having joined the firm. In addition, two independent boards of directors have also been appointed before the IPO. However, Paytm’s President Amit Nayyar, who was heading its stockbroking, insurance distribution vertical Paytm Money, has quit the firm along with other top executives.