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The proposed ₹18,300-crore initial public offering (IPO) of Paytm parent, One97 Communications Ltd, will make it one of India’s 50 most valuable companies.
At the upper end of the price band of ₹2,150 apiece, Paytm will have a post-money valuation of ₹1,39,378.84 crore, which will propel it to the 36th position by market capitalization among listed companies.
Paytm’s market cap will be more than established companies such as Hindustan Zinc, NTPC, Divi’s Laboratories, Power Grid Corp., Indian Oil Corp., Vedanta, Pidilite Industries, SBI Life Insurance, Grasim Industries, Bajaj Auto, L&T Infotech, Mahindra & Mahindra, Hindalco Industries, Coal India, Zomato, SBI Cards and DLF Ltd.
The three-day public share sale, which will be open for subscription on 8 November, will comprise a fresh issue of ₹8,300 crore and an offer for sale of ₹10,000 crore.
The fintech company has over 330 million users, including 50 million active monthly users and 21 million registered merchants on its platform.
Paytm’s losses narrowed in June on the back of lower marketing expenses and payment processing charges. It clocked sales of ₹3,186.80 crore in June compared to ₹3,540.70 crore in June 2020. Net losses narrowed to ₹1,701 crore from ₹2,942.4 crore in the period under consideration. Total borrowings stood at ₹476 crore in June compared to ₹544.90 crore in June 2020.
“At ₹1.39 trillion valuation, the price to sales will be 47.1x, which is definitely very expensive. But no one truly knows how these fintech companies will pivot and become profitable. Hence, we would like to wait and watch this space and this company," said Aditya Kondawar, chief operating officer, JST Investments.
Out of the total proceeds of the IPO, ₹4,300 crore will be used to grow and strengthen Paytm’s ecosystem; it will offer easy access to technology and financial services to acquire new clients and business partners, and retain existing customers and merchants.
Besides, the firm will invest ₹2,000 crore in new business initiatives, acquisitions and strategic partnerships.
As of June, it had serviced 65 million payment bank accounts and had total deposits worth ₹5,800 crore.
The firm launched Paytm in 2009 as a mobile-first digital payments platform to enable cashless payments. Starting with bill payments and mobile top-ups, it expanded its services as a payment instrument with Paytm Wallet. As of March, it was the largest payments platform in India in terms of the number of consumers, merchants, transactions and revenue.
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