The fintech and payment processing firm PayU, backed by Netherlands-based technology investment giant Prosus, is looking to list in India sometime next year, sources said. The fintech firm is looking at a valuation of $6-6.5 billion.
The company is expected to come out with a draft red herring prospectus (DRHP) by the end of this year or early next year, a source added.
PayU had appointed former Nykaa Chief Financial Officer (CFO) Arvind Agarwal as its CFO in November 2022, and the move was to prepare the company for its IPO journey, a senior executive at PayU said requesting anonymity.
PayU India reported $400 million in revenue for the financial year that ended in March 2023, registering a growth of 31 percent, the company said in a statement. Going by its growth and profitability, the company could seek a valuation of somewhere between $4-$6 billion, the source said.
The company could bring down the valuation if it is too much for the markets, the source added. However, the PayU executive said that it was too early to talk about valuations.
“They wanted someone who had the experience of taking the startup public in India to walk them through the complicated regulations that come with it,” the PayU executive added.
PayU has not appointed any investment bankers as of now, the sources said.
Agarwal was CFO of Nykaa from July 2020 to November 2022, and Nykaa was listed on the stock markets in November 2021. He had also overseen the merger of Vodafone India with Idea Cellular in 2018.
PayU's India journey
According to the PayU executive, Prosus has been preparing to sell all its non-core assets since late last year and focus on its IPO. The Indian entity also has a payment authenticating platform Wibmo and credit entity PayU Finance, a non-banking financial company as its subsidiaries. A few months ago, Prosus sold Olx Auto's India division to CarTrade for Rs 537 crore.
On August 1, the payment firm announced that it was selling most of its international businesses outside of India to Rapyd for $610 million. The company said that it intends to focus on its payment and credit opportunities in India.
"We are now fully focused on the huge fintech opportunity in India, where PayU is the leading payments service provider and is rapidly expanding its credit offering. Innovation and progressive regulation are driving rapid change within the digital payments industry in India, and we see many new opportunities to further expand our business there,” Bob van Dijk, Prosus and Naspers CEO said on August 1.
PayU had signed an agreement with rival payments firm Billdesk to acquire the latter for $4.7 billion back in August 2021. However, the company announced the termination of the deal in October 2022.
Payments firm Paytm, which has both consumer and merchant business along with a strong credit facilitating platform, is valued at around $6.25 billion as of August 2.
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