Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 1.89 timeson November 10, the third and final day of bidding, receiving bids for 9.13 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.66 times, while the reserved portion of non-institutional investors was subscribed 24percent, and qualified institutional buyers have put in bids 2.79 times the portion set aside for them.
Grey Market Premium
Paytmshares traded at Rs 2,210 in thegreymarket, a premium of Rs 60 or 2.8 percent over upper price band of Rs 2,150 per share, as per the IPO Watch and IPO Central.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 1.88 timeson November 10, the third and final day of bidding, receiving bids for 9.12 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.64 times, while the reserved portion of non-institutional investors was subscribed 24percent, and qualified institutional buyers have put in bids 2.79 times the portion set aside for them.
Paytm Financials
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 1.51 timeson November 10, the third and final day of bidding, receiving bids for 7.3crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.61 times, while the reserved portion of non-institutional investors was subscribed 20percent, and qualified institutional buyers have put in bids 2.13 times the portion set aside for them.
Jyoti Roy Recommends Paytm IPO
"At the upper end of the price band,Paytmis valued at 49.7x its FY21 revenues. While valuations may appear to be expensive,Paytmhas become synonymous with digital payments through mobile and is the market leader in the mobile payment space. Patym is well positioned to benefit from the exponential 5x growth in mobile payments between FY2021 – FY2026 and hence believe that the valuations are justified. We recommend investors to subscribe to the issue," saysJyotiRoy, who is DVP- Equity Strategist atAngel One.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 1.36 timeson November 10, the third and final day of bidding, receiving bids for 6.59crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.58 times, while the reserved portion of non-institutional investors was subscribed 17percent, and qualified institutional buyers have put in bids 1.89 times the portion set aside for them.
Anand Rathi Says Subscribe Paytm IPO
"At the upper end of the IPO price band, One 97 Communications Ltd. is offered at P/B of 9.5x with a market capitalization of Rs 1,39,378.8 crore. The company benefits from both customer side and merchant side by providing payment and other services through Paytm app, the company further aims to expand its reach and benefit from scale which is challenging for other players. The company reported contribution profit of Rs 363 croreand EBITDA loss of Rs 1,655 crorein FY21. Given that the company’s ecosystem allows it to address large market opportunities, scale and reach, product, technology and leadership," says Anand Rathi which gives this IPO a "Subscribe (Long-Term)" rating.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 1.35 timeson November 10, the third and final day of bidding, receiving bids for 6.55 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.57 times, while the reserved portion of non-institutional investors was subscribed 15percent, and qualified institutional buyers have put in bids 1.89 times the portion set aside for them.
Key Strategy of Paytm
One 97 Communications is focused on rapidly scaling up its financial services business. The company will focus on consumers and merchants who have limited access to financial services products, and continue to work in close collaboration with its financial institution partners to create products and services addressing their requirements while leveraging its technology and insights. A key strategic focus for it is to scale up its consumer and merchant lending businesses, including Paytm Postpaid (buy-now-pay-later), in collaboration with its financial partners, as well as its wealth management offerings. The company plans to continue to leverage its partnership with Paytm Payments Bank to expand the suite of banking solutions for consumers and merchants.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 1.34 timeson November 10, the third and final day of bidding, receiving bids for 6.47 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.53 times, while the reserved portion of non-institutional investors was subscribed 13percent, and qualified institutional buyers have put in bids 1.88 times the portion set aside for them.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 1.33 timeson November 10, the third and final day of bidding, receiving bids for 6.44 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.50 times, while the reserved portion of non-institutional investors was subscribed 13percent, and qualified institutional buyers have put in bids 1.88 times the portion set aside for them.
KRChoksey Research on Paytm IPO
"We believe for current valuations to sustain, the company has to remain on the path of high growth trajectory for revenues for a period of next 3 years at least.All three verticals have to keep on firing at an accelerated pace. As per our estimates, payment revenues have to grow at a CAGR of >40%, Ecommerce and cloud revenues at > 50% and financial services at > 100% CAGR for a period of next 3 years," says KRChoksey Research which recommended subscribe rating for listing gains.
"Looking at the past track record, we are reasonably confident that management will leave no stone unturned to achieve this. What remains to be seen is that how this growth can be achieved without burning too much of cash.We are of the opinion that during first half of current decade company will focus more on financial services and Cloud & E commerce services to turn them into profitable ventures. As most of the positives are already getting captured in the current valuation, leaving little room for sustainable upside," the brokerage says.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 1.08 timeson November 10, the third and final day of bidding, receiving bids for 5.24 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.43 times, while the reserved portion of non-institutional investors was subscribed 7 percent, and qualified institutional buyers have put in bids 1.47 times the portion set aside for them.
Expert's View on Paytm
"Paytm is listing at a valuation of $19 billion at a stratospheric price to revenue multiple of 50. The company is justifying that with its massive scale and the exponential growth journey for fintech in the coming years. Paytm also has a synergetic ecosystem of payment services, merchant payments, e-commerce, cloud services, and financial services, which it aims to leverage to increase its market share in the future," saysSonamSrivastava, Co-founder of Wright Research.
Paytm has been “burning money” with cashback and marketing in its path to exponential growth in GMV (gross merchandise value). As the company matures, matching the global peers like Paypal, Stripe the revenue multiple is expected to come down, cashback and marketing to reduce, and margins to turn positive in the next five years. The buoyant public market has presented a perfect place for Paytm to charge the hefty valuation, but the management’s execution would be the critical deciding factor for post IPO price, she adds.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 97 percent on November 10, the third and final day of bidding, receiving bids for 4.7 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.42 times, while the reserved portion of non-institutional investors was subscribed 7 percent, and qualified institutional buyers have put in bids 1.27 times the portion set aside for them.
Expert's Take on Paytm
Jyoti Roy, who is the DVP - Equity Strategy at Angel One, says Patym should be able to grow ahead of the markets given its dominant position in the mobile payments space which is expected to grow five-fold between FY2021 and FY2026.
“We believe that Paytm will be able to post a revenue CAGR of 52 percent between FY21 and FY24, valuing the company at 14.2xFY24 price to sales which looks reasonable,” he says in an interview withMoneycontrol.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 68 percent on November 10, the third and final day of bidding, receiving bids for 3.27 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.41 times, while the reserved portion of non-institutional investors was subscribed 7 percent, and qualified institutional buyers have put in bids for 73 percent shares of the portion set aside for them.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 67 percent on November 10, the third and final day of bidding, receiving bids for 3.22 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.40 times, while the reserved portion of non-institutional investors was subscribed 7 percent, and qualified institutional buyers have put in bids for 72 percent shares of the portion set aside for them.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 56 percent on November 10, the third and final day of bidding, receiving bids for 2.71 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.38 times, while the reserved portion of non-institutional investors was subscribed 6 percent, and qualified institutional buyers have put in bids for 54 percent shares of the portion set aside for them.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 55 percent on November 10, the third and final day of bidding, receiving bids for 2.65 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.32 times, while the reserved portion of non-institutional investors was subscribed 5 percent, and qualified institutional buyers have put in bids for 54 percent shares of the portion set aside for them.
Paytm IPO Day 3 updates
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 49 percent on November 10, the third and final day of bidding, receiving bids for 2.36 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.24 times, while the reserved portion of non-institutional investors was subscribed 5 percent, and qualified institutional buyers have put in bids for 46 percent shares of the portion set aside for them.
Arihant Capital Markets on Paytm
Monetising the large installed customer/merchant base of Paytm for broader financial service offerings, such as credit, wealth, and insurance is the key opportunity for the company and it would lead to the profitability going forward. However, the company’s history of net losses and negative cash flows in prior years put a big question mark on its ability to turn green. The company may not be able to pass on any increases in payment processing charges payable to financial institutions and card networks, to its customers which may result in losses.
The brokerage finds the valuations on the higher side and works out that at the upper band of Rs 2,150, the issue is valued at a P/BV of 21.3x FY21 P/BV and 49.7x FY21 P/sales (post issue). It recommends investors to subscribe to this issue for ‘listing gains’
Paytm IPO Day 2 highlights
One97 Communications-owned Paytm opened its initial public offering for subscription on November 8. This is the largest-ever public issue in the history of Indian capital markets.
The Rs 18,300-crore IPO had been subscribed 48 percent on November 9, the second day of bidding, receiving bids for 2.34 crore equity shares against offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.23 times, while the reserved portion of non-institutional investors was subscribed 5 percent, and qualified institutional buyers have put in bids for 46 percent shares of the portion set aside for them.
Divam Sharma of Green Portfolio
Paytm has created a leading digital eco-system for consumers as well as merchants. It addresses a very large market opportunity across payment services, commerce and cloud services and financial services. Some of its strengths are:
- Trusted brand, scale and reach
- Product & technology DNA
- Network effect with 333+ million consumers and 22+ million merchants
- Culture of innovation and pioneering new products
- High volume market share of 40 percent in payment transactions and 65-70 percent market share in wallet payment transactions
That being said, at the upper band of Rs 2,150, the issue is valued at a P/BV (price-to-book value) of 21.3x FY21 P/BV and 49.7x FY21 P/sales (post issue).
In our opinion the valuation is on the higher side and we would recommend that investors wait for a better opportunity to make entry into the stock. While one could justify such high valuations on the back of industry wide growth, it is noteworthy that the company posted a decline in revenues in FY21, the year of the pandemic, when use of digital and mobile payments surged.
Jyoti Roy - DVP- Equity Strategist at Angel
Paytm's Rs 18,300 crore IPO is open for subscription for which we had given a subscribe rating. We believe that Patym is well-positioned to benefit from the exponential 5x growth in mobile payments between FY2021 – FY2026 to $3,065 billion which will help drive topline growth for the company. We recommend that investors should subscribe to the IPO rather than take a call post the listing.
Sonam Srivastava, Co-founder of Wright Research on Paytm IPO
: Paytm IPO is not only the largest ever IPO in India, but it also marks the entry of a disruptive Fintech innovator into the Indian public market. The new economy of fintech, digital-first space will have the highest growth potential in the coming few years in India with penetration of banking and digitization both multiplying. Paytm IPO will allow the Indian public markets to participate in this growth journey.
Paytm has a colossal scale, brand value, and an ecosystem of interconnected digital fintech businesses in payment, credit, banking, wealth management, and e-commerce that can grow with synergy. However, Paytm is a growth company that is loss-making and would continue to be so. Paytm also faces stiff competition in the Payments space from UPI and Google and its aspirational foray into financial services from established players.
Given the IPO frenzy that we see in India with an average listing gain of 44 percent, this flag-bearing IPO is a good bet for listing gains. However, post IPO, even though the growth potential of fintech disruption makes it attractive, the company would need to justify its hefty valuation by maintaining the growth in market share, cutting marketing spending, and gaining profitability.
