Moneycontrol PRO

Paytm board meets today to approve India's biggest IPO: All you need to know

The eight-member board will meet over a virtual meeting to give their go-ahead for a $3 billion initial public offering (IPO), making it the biggest in India's history.

May 28, 2021 / 07:26 AM IST
Paytm | Representative Image

Paytm | Representative Image

The board of One97 Communications, the parent firm of Paytm, will meet on May 28 to discuss plans to go public in what is touted to be one of the country's largest initial public offerings (IPO), said sources privy to the development.

Paytm's $3 billion IPO

The eight-member board will meet over a virtual meeting to give their go-ahead for a $3 billion initial public offering (IPO), making it the biggest in India's history. It is currently valued at $16 billion.

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.

Paytm's journey: From payments to full-stack

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.

Paytm's financials

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 financial year 2023 to $1 billion with non-payments revenue contributing 33%.

Paytm ranks third on UPI payments with a 12% share but leads on integrated merchant payments processed, according to a report published by research firm Bernstein. Paytm has over 350 million installed user base besides 20 million merchants on its platform.

The company competes with Walmart-owned PhonePe and Google Pay. In March, Paytm claimed to have crossed 1.2 billion monthly transactions across payments methods such as Wallet, UPI, cards and internet banking, PhonePe clocked over 1.07 billion transactions across UPI, cards, and wallets.

On average, India clocks 3.3 billion digital transactions per month across payment methods such as UPI, credit cards, debit cards, wallets.

Paytm last announced a fundraise of $1 billion in a round which was led by US-based asset manager T Rowe Price. Existing investors Ant Financial, SoftBank Vision Fund and Discovery Capital also participated in the round. During this round, the company was valued at $16 billion.

Here's a look at the One97 board that will meet today

1. Vijay Shekhar Sharma -- Founder & CEO of One97 Communications.
2. Ravi Adusumalli -- Managing Partner and head of India operations at Elevation Capital
3. Eric Jing -- Executive Chairman of China's Ant Group.
4. Pallavi Shroff -- Founder and Managing Partner of Shardul Amarchand Mangaldas law firm. (Independent Director)
5. Todd Combs -- Investment manager at Berkshire Hathaway
6. Mark Schwartz -- Vice Chairman of the Goldman Sachs Group (Independent Director)
7. Munish Varma -- Managing Partner at SoftBank Investment Advisers

8. Michael Yao -- Senior Vice President of Alibaba Group

Paytm IPO: A tipping point for Indian startups?

For the longest time, startup IPOs in India have been a distant dream for investors who pumped billions of dollars in funding startups. But this is finally changing this year, with at least half a dozen firms expected to go public.

While Zomato has already filed its Draft Red Herring Prospectus, Nykaa, Delhivery and Policybazaar are also expected to go public. Paytm's IPO will likely be a tipping point, prompting a new wave of capital given that startups are finally showing a stable exit path for investors.
Invite your friends and family to sign up for MC Tech 3, our daily newsletter that breaks down the biggest tech and startup stories of the day

Priyanka Sahay
first published: May 28, 2021 07:21 am