Paytm shares in high demand in unlisted market as it files for IPO

Paytm app is seen on a smartphone in this illustration taken (REUTERS) — Paytm app is seen on a smartphone in this illustration taken **(REUTERS)**

2 min read . Updated: 16 Jul 2021, 03:53 PM IST Livemint

Paytm IPO could be the biggest in India’s stock market history, surpassing the IPO of the state-owned Coal India in 2010

One97 Communications Ltd., which operates brand Paytm, today filed its draft paper with the market regulator Securities and Exchange Board of India (SEBI) for its initial public offering of up to ₹16,600 crore. The IPO will include an issue of new shares worth ₹8,300 crore and an offer for sale (OFS) worth ₹8,300 crore.

As per market observers, Paytm shares in the unlisted market have seen a strong demand post today's update on its IPO front. ''In the unlisted market, shares of Paytm is in high demand, company share price has increased from ₹1,000 before the news of IPO to ₹2,500 as per the market reports. We have a positive outlook for the Paytm IPO,'' Yash Gupta, Equity Research Associate, Angel Broking Ltd said.

Paytm's IPO could be the biggest in India’s stock market history after Coal India's ₹15,200 crore share sale in 2010. The Noida-based company said it would use the IPO proceeds to strengthen its payment ecosystem and for new business initiatives and acquisitions. ICICI Securities, J.P. Morgan, Morgan Stanley, Citibank and HDFC Bank are among the company’s lead bookrunners for the offer.

Even in June, when the news had come out that the digital payment firm will come up with its IPO, Paytm's stock had been in great demand in the grey market as the stock price had risen to ₹21,000 from ₹11,500 in the four days period. Grey market is attributed to channels where shares of a company are bought and sold outside the official trading channels.

According to the Draft Red Herring Prospectus (DRHP), ANT Financial continues to be the largest shareholder holding 29.6% stake in Paytm; Softbank Vision Fund holds around 19.6% stake, and Alibaba 7.2% stake in the company. Elevation Capital and Berkshire hold 5.1% and 2.8% in the company respectively. While founder Vijay Shekhar Sharma and his affiliate VSS Investco hold 9.6% and 5% in Paytm respectively.

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