The decks have been cleared for the country’s largest initial public offering (IPO) — with the Securities and Exchange Board of India (Sebi) on Friday giving its approval for the share float of One97 Communications, the parent of digital financial services firm Paytm.
The country’s second most valuable start-up after Byju’s is set to make an initial public offer of Rs 16,600 crore.
The company which is backed by SoftBank and Alibaba’s Ant Financial is likely to hit the markets by the end of this month. One97 Communications had filed its draft prospectus with the market regulator in July.
The IPO will be a fresh issue aggregating to Rs 8,300 crore and an offer for sale of a similar amount by the existing shareholders.
While filing for the share sale, the company had said it retains the option in discussion with book running lead managers to undertake a pre IPO placement of Rs 2,000 crore However, it is now learnt that Paytm is unlikely to go ahead with this pre IPO placement.
Market circles expect interest in Paytm to remain high though the secondary markets have come under pressure over the past few sessions because of concerns over valuations and rising input prices
Since Zomato’s share float in July, new age tech companies are tapping the primary market. Zomato’s IPO which had come in the price band of Rs 72-76 per share was subscribed over 38 times.
Recently, hospitality firm OYO filed preliminary papers with Sebi to raise Rs 8,430 crore through an initial share-sale. Some of the others that are set to raise funds include Policybazaar, Nykaa and Mobikwik Systems.
The top five shareholders of One97 Communications are ANT Financial through Antfin (Netherlands) Holding B.V with 29.6 per cent stake.
SVF India Holdings (Cayman) Ltd or SoftBank Vision Fund holds 18.3 per cent and SAIF III Mauritius Company Ltd, 12.1 per cent.
Founder Vijay Shekhar Sharma holds 9.6 per cent stake and Alibaba.com Singapore E-Commerce Pvt Ltd has a 7.2 per cent stake. Sharma, ANT Financial, Alibaba, SoftBank and SAIF are expected to sell some their shares.
Paytm was launched in 2009 as a digital platform to enable cashless payments, starting with assistance in bill payments and offering mobile top ups. It then set up the “Paytm Wallet” in 2014 and built a payments platform.
According to the company, it has the country’s largest payments platform based on the number of consumers and merchants, number of consumer-to-merchant transactions and revenues as of March 31, 2021.
The previous record for India’s largest IPO was held by Coal India which mobilised Rs 15,000 crore, more than a decade ago.
