Patym Aims $20 Billion Valuation in Biggest Indian IPO
Paytm's IPO, touted as the largest ever in India, is expected to value the company at around $19.5-$20 billion when it opens for subscription on November 8.
The valuation was described as “rational and fair” by the firm, despite the fact that it could have valued itself higher depending on interest from external investors in the run-up to the IPO.
Vijay Shekhar Sharma, founder and CEO of Paytm's parent company, One97 Communications said, “we don't need to hike the price just because everybody is ready to give money. We kept it (valuation of $19.5-$20 billion) rationally and chose to put a lower number in the choice of different valuations we had on the table”.
When it raised $1 billion in 2019, the Noida-based firm was valued at $16 billion.
Sharma claims that the value will enable a large number of people to participate in the company's much-anticipated initial public offering (IPO). He said, “we want as many people (as possible) to make money, considering we could see there is a huge demand ahead of us”.
The INR 18,300 crore Paytm IPO would offer shares at a price range of INR 2,080-2,150 per share. On November 10th, the subscription will come to an end.
The business plans to begin trading on the stock exchanges a week later.
Sharma said, “There is a global macro towards India right now (listed or private). This is the age and time of India. If 2010-2020 was for Asia at large, China and Japan and others, 2021-2030 is 100% for India. Whether you're a private company, young startup or potentially (looking) to list, this is the time the world is going to give you money”.
Paytm's president and global chief financial officer, Madhur Deora, also stated that the business is likely to seek long-term investors for its anchor placement, as opposed to those looking for a rapid profit following the IPO.
Paytm will continue to pursue expansion, according to Sharma and Deora, but it will be Paytm's “efficient growth”.
Deora said, “Investors understand that for technology companies to create very large outcomes they cannot manage them quarter-on-quarter, whether private or public. What we are going to do is focus on revenue growth and as efficiently as possible”.
CPPIB of Canada, Alkeon Capital of the United States, and funds run by Morgan Stanley and Goldman Sachs have all shown interest in the IPO. Paytm has also conducted conversations with the Abu Dhabi Investment Authority (ADIA), Singapore's GIC, and BlackRock for an anchor investment position.
Deora said, “We are going to select investors (in anchor slots to the extent possible) who have a track record of being long-term investors. It does not mean we can force them to not sell or anything of that nature, but they have a track record”.
According to Paytm's Red Herring Prospectus (RHP), its operating income increased by 61% year over year to over INR 890 crore in the June quarter.
Payment and financial services, which today account for about 77 % of total revenue, are the company's main sources of income. Paytm reported a loss of INR 382 crore in the June quarter, up from INR 284 crore a year ago.
Sharma stated that the company will continue to pursue expansion by focusing on merchant acquisition and expanding its financial services industry.
Sharma was referring to some of the company's commercial operations, such as ticketing and travel. “We don't and we won't give cashbacks. We are clear about it. It is important to run a prudent, scalable business and to do that we give access to the merchants to sell on our platform”. According to him, the company would not raise money through a pre-IPO placement.
Sharma said, “frankly, we had so much in-bound interest that we could easily have raised a chunk of the capital in a pre-IPO round. But I discussed with Madhur (Deora) and concluded we should give all our investors an equal opportunity to invest in us. The entire offer will open on November 8”.
Following the rise in the amount of Paytm's IPO, the OFS component is now INR 10,000 crore, with Sharma, Alibaba, Elevation Capital, Ant Group, and Soft Bank among the main players selling a portion of their stakes.
The valuation was described as “rational and fair” by the firm, despite the fact that it could have valued itself higher depending on interest from external investors in the run-up to the IPO.
Vijay Shekhar Sharma, founder and CEO of Paytm's parent company, One97 Communications said, “we don't need to hike the price just because everybody is ready to give money. We kept it (valuation of $19.5-$20 billion) rationally and chose to put a lower number in the choice of different valuations we had on the table”.
When it raised $1 billion in 2019, the Noida-based firm was valued at $16 billion.
Sharma claims that the value will enable a large number of people to participate in the company's much-anticipated initial public offering (IPO). He said, “we want as many people (as possible) to make money, considering we could see there is a huge demand ahead of us”.
The INR 18,300 crore Paytm IPO would offer shares at a price range of INR 2,080-2,150 per share. On November 10th, the subscription will come to an end.
The business plans to begin trading on the stock exchanges a week later.
Sharma said, “There is a global macro towards India right now (listed or private). This is the age and time of India. If 2010-2020 was for Asia at large, China and Japan and others, 2021-2030 is 100% for India. Whether you're a private company, young startup or potentially (looking) to list, this is the time the world is going to give you money”.
Paytm's president and global chief financial officer, Madhur Deora, also stated that the business is likely to seek long-term investors for its anchor placement, as opposed to those looking for a rapid profit following the IPO.
Paytm will continue to pursue expansion, according to Sharma and Deora, but it will be Paytm's “efficient growth”.
Deora said, “Investors understand that for technology companies to create very large outcomes they cannot manage them quarter-on-quarter, whether private or public. What we are going to do is focus on revenue growth and as efficiently as possible”.
CPPIB of Canada, Alkeon Capital of the United States, and funds run by Morgan Stanley and Goldman Sachs have all shown interest in the IPO. Paytm has also conducted conversations with the Abu Dhabi Investment Authority (ADIA), Singapore's GIC, and BlackRock for an anchor investment position.
Deora said, “We are going to select investors (in anchor slots to the extent possible) who have a track record of being long-term investors. It does not mean we can force them to not sell or anything of that nature, but they have a track record”.
According to Paytm's Red Herring Prospectus (RHP), its operating income increased by 61% year over year to over INR 890 crore in the June quarter.
Payment and financial services, which today account for about 77 % of total revenue, are the company's main sources of income. Paytm reported a loss of INR 382 crore in the June quarter, up from INR 284 crore a year ago.
Sharma stated that the company will continue to pursue expansion by focusing on merchant acquisition and expanding its financial services industry.
Sharma was referring to some of the company's commercial operations, such as ticketing and travel. “We don't and we won't give cashbacks. We are clear about it. It is important to run a prudent, scalable business and to do that we give access to the merchants to sell on our platform”. According to him, the company would not raise money through a pre-IPO placement.
Sharma said, “frankly, we had so much in-bound interest that we could easily have raised a chunk of the capital in a pre-IPO round. But I discussed with Madhur (Deora) and concluded we should give all our investors an equal opportunity to invest in us. The entire offer will open on November 8”.
Following the rise in the amount of Paytm's IPO, the OFS component is now INR 10,000 crore, with Sharma, Alibaba, Elevation Capital, Ant Group, and Soft Bank among the main players selling a portion of their stakes.
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