Paytm IPO opens Nov 8; check price band, lot size, bid details for India’s largest public issue

The public issue comprises a fresh issue of equity shares worth Rs 8,300 crore and an offer for sale (OFS) of up to Rs 10,000 crore

Paytm’s Rs 18,300-crore IPO — India’s largest to date — will open for subscription on 8 November 2021, at a price band of Rs 2,080-2,150 per share of face value of Rs 1 each. The IPO would topple the 2010 public issue of state-run Coal India Ltd as the largest ever. Paytm IPO will close for subscription on 10 November. The firm has increased its IPO size by Rs 1,700 crore to Rs 18,300 crore from Rs 16,600 crore, with the increment coming entirely from the existing shareholders selling more stake. The public issue comprises a fresh issue of equity shares worth Rs 8,300 crore and an offer for sale (OFS) of up to Rs 10,000 crore.

The book running lead managers for the IPO 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 to the issue. Investors can place bids for a minimum of six equity shares and in multiples thereafter. Not more 75 per cent of the net issue will be reserved for Qualified Institutional Buyers (QIBs), 10 per cent for retail investors and the remaining 15 per cent for non-institutional investors (NIIs). The weighted average return on net worth for the last three fiscals is negative 36.9 per cent. Investors would require to ensure that the bank account used for bidding 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 equity shares will be listed on the Bombay Stock Exchange and the National Stock Exchange. The company will utilise the net proceeds for growth and strengthening of its ecosystem, including customer and merchant acquisition worth Rs 4,300 crore, and investing in new business initiatives, acquisitions, and strategic partnerships worth Rs 2,000 crore, and general corporate purposes.

Digital payments have been growing steadily over time, however, India continues to be cash-driven economy. In FY 2021, the digital payments market size by value stood at approximately US$ 20 trillion with 43 billion transactions during the year. Consumers are rapidly switching to digital payments as it provides simple, safe and convenient ways to transfer money across accounts. Similarly, for merchants, acceptance of payments in digital form has increased significantly. One of the key examples of changing trends during COVID-19 was seen prominently in Kirana stores across the country. With increased focus on social distancing, government guidelines deterring people from moving for safety concerns, merchants moved to digital mode of payments leading to an increase in digital consumer to merchant payment volumes. Demonetisation in 2016, also played a role in pushing merchants to accept payments digitally and led to growth in products like QR and wallets