One97 Communications, the parent of digital payments giant Paytm is likely to file its draft red herring prospectus (DRHP) with market regulator Sebi shortly after the firm’s EGM scheduled for July 12, 2021, multiple industry sources with knowledge of the matter told Moneycontrol.
The combined size of the IPO, including both fresh issue and the offer for sale by selling shareholders, is likely to be in the range of $2.2 billion to $2.3 billion, they said, adding that the size could be increased later if required.
“The plan is for the papers to be filed with the regulator once the shareholders’ approval for the IPO is secured at the EGM. So it could be filed on the same day or a few days later,” one of the persons cited above told Moneycontrol.
“Seven investment banks, namely Morgan Stanley, Goldman Sachs, ICICI Securities, JP Morgan, Axis Capital, Citi and HDFC have been finalised,” a second person added.
“They are aiming for a valuation between $24 billion and $25 billion for this mega issue,” a third person told Moneycontrol.
If plans fructify, Paytm’s initial share sale would exceed Coal India Ltd’s offering, which raised Rs 15,000 crore in 2010 in the country’s largest IPO so far.
When contacted, Paytm declined to comment in response to an email query from Moneycontrol. Morgan Stanley, ICICI Securities and HDFC Bank declined to comment as well. Moneycontrol is awaiting a response from the other i-banks.
Reuters was the first to report Paytm’s DRHP filing timeline earlier on July 5, 2021.
Earlier, Paytm had called an extraordinary general meeting (EGM) on July 12 to seek shareholders nod to raise Rs 12,000 crore through a fresh issue of shares.
The stakeholders will also decide if founder and chief executive Vijay Shekhar Sharma can be declassified as the promoter as he does not own the requisite 20 per cent stake as per Sebi norms to be a promoter. He currently holds 14.61 percent stake in the firm. Hence, the firm is gunning for a professionally managed company or PMC status. Moneycontrol had reported on these modalities earlier on June 18, 2021.
Paytm’s key shareholders include Alibaba's Ant Group which holds 29.71 percent stake, while Softbank Vision Fund and Saif Partners hold 19.63 percent and 18.56 percent, respectively.
Ahead of its IPO, Paytm has reported a revenue of Rs 3,186 crore for the financial year 2020-21 against Rs 3,540 crore in the previous year. Its losses also narrowed to Rs 1,701 crore during the period under review from Rs 2,942 crore in the previous year.