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Paytm Aiming For $2.2B IPO In India At $25B Valuation

Digital payments firm Paytm is targeting a $2.2 billion initial public offering (IPO) in India at a valuation of $25 billion, Reuters reported on Friday (July 16), citing sources.

Backed by Ant Group, Softbank, and Berkshire Hathaway, Paytm’s planned IPO will be one of the largest stock market listings in India. A subsidiary of One97 Communications, Paytm is planning to float shares worth 83 billion rupees and current investors will sell 83 billion rupees in stock, Reuters reported. 

The digital payment market is hot in India, with Paytm competing against Google Pay and WhatsApp Pay. Paytm will use the capital from the IPO to solidify its network and acquire new companies.

“Companies within the digital space have good growth potential because of the increase in the number of internet users and wide access among the youth,” Ajit Mishra, vice president of research at Religare Broking in Noida, told Reuters.

Founded in 2010 by billionaire entrepreneur Vijay Shekhar Sharma, Paytm has moved beyond the booming digital payments space and now offers insurance, gold sales, tickets to entertainment, and bank deposits and remittances. 

Paytm’s IPO is anticipated to be a catalyst for other Indian FinTechs to go after public listings as a way to raise capital and expand. Several Indian startups have IPO plans in the works.

Ant-backed Zomato, an Indian food delivery startup, filed for a $1.3 billion public listing that was oversubscribed. Walmart’s Flipkart also has IPO plans, as does the ride-hailing firm Ola and the cosmetics company Nykaa.

One97 lost 16.96 billion rupees for the year that ended in March, compared to a 2020 loss of 28.42 billion rupees, Reuters reported, citing the prospectus. Revenue dropped to 28.02 billion rupees, a 14.6 percent loss.

One97 is mulling an additional float ahead of the IPO that could be worth as much as 20 billion rupees, Reuters reported. 

Paytm’s IPO will be the third-largest in India, coming in behind Coal India’s public listing in 2010 and Reliance Power in 2008. 

The public listing for Paytm is being handled by J.P. Morgan Chase, Morgan Stanley, ICICI Securities, Goldman Sachs, Axis Capital, Citi and HDFC Bank.

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