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Paytm looks to raise $3 billion by selling shares to the public

One97 Communications India Ltd, which runs the Paytm service, is likely to go for an IPO with almost double the valuation.

May 30, 2021 / 02:41 PM IST
Image Courtesy: Wikimedia Commons

Image Courtesy: Wikimedia Commons

Paytm, India's largest payments company, board on May 28 met to discuss an initial public offering proposal with an aim to raise $3 billion. However, according to a source, the IPO will be launched later this year but the company is not ready to announce the same as yet.

One97 Communications India Ltd, which runs the Paytm service, is likely to go for an IPO with almost double the valuation. The company was last valued at $16 billion when it raised $1 billion from Softbank and Ant Financial in 2019.

"IPO came up for discussion," the source said.

If it goes through, it is likely to be one of India's largest initial public offerings (IPO) in India.

The company plans to list in November, Bloomberg had reported earlier. Bloomberg report also said Paytm is in the process of finalising bankers for the issue, with Morgan Stanley likely to emerge favourite.

The company, which has been dominating the payments market in India, started off as a bill-payments, mobile recharge platform in 2010. It launched a mobile wallet in 2014.

Of late, Paytm has been trying to acquire market share across a spectrum of financial services offerings by launching mutual funds, wealth management, stock trading, and insurance services. It has also applied for a New Umbrella Entity (NUE) license, as part of a consortium comprising Ola, IndusInd Bank, Zeta, Suryoday Small Finance, among others. It has also applied for a general insurance license.

For the year FY20, it posted revenues of Rs 3,280 crore while its losses shrank 30% to Rs2,942 crore. According to a note released by Bernstein, Paytm's revenue base is likely to double by the financial year 2023 to $1 billion with non-payments revenue contributing 33%.

The company has over 350 million installed user bases besides 20 million merchants on its platform.

Besides Paytm, in next year, at least 3-4 companies such as Zomato, Nykaa, Delhivery, and Policybazaar are expected to go public, prompting a new wave of capital given that startups are finally showing a stable exit path for the investor.

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Priyanka Sahay
first published: May 30, 2021 01:25 pm