paytm ipo: Ant Group may execute around 50% of Rs 10,000 crore OFS in Paytm IPO
Paytm, backed by Japan’s SoftBank and China’s Alibaba, has also finalised plans to increase the total IPO size by another Rs 1,700 crore, taking the total to Rs 18,300 crore (around $2.5 billion).
ET was the
first to report last week that Paytm would increase its IPO size by Rs 1,000-2,000 crore, breaching the Rs 18,000 crore mark. The increase of Rs 1,700 crore will be fully through the OFS and the primary capital raise component will remain unchanged at Rs 8,300 crore, people briefed on the matter said.
This means Ant Group, which owns a little over 29% in the Noida-based company, would sell shares worth up to around Rs 5,000 crore, bringing its holding to below 25% in One97 Communications, the parent firm of Paytm.
received approval from capital markets regulator, the Securities and Exchange Board of India (Sebi), for the IPO and is expected to file its RHP (red herring prospectus) over the coming days to reflect the increase in issue size. It is looking at a public market listing –
billed as one of the largest IPOs in at least a decade – by mid-November.
reported on July 16 that Ant Group was looking to sell about 5% in Paytm. Alibaba separately owns around 7% in the fintech firm.
SoftBank, Elevation Capital and Paytm founder Vijay Shekhar Sharma will be among the other shareholders to sell parts of their stake in the Rs 10,000 crore OFS.
Ant’s dilution of its stake to below 25% is also necessary as the payments firm is listing as a ‘professionally managed company’.
As per the regulations, no single entity can hold more than 25% in a ‘professionally managed company’. Sharma was also declassified as its promoter in July.
A Paytm spokesperson declined to comment.
“They were considering this increase in issue size due to the increased interest in the IPO buoyed by the abundance of liquidity among global investors,” a person aware of the discussions said. ET reported earlier this month that marquee global investors had held talks with Paytm for an anchor investor slot in its IPO.
News wire Bloomberg had pegged Paytm’s valuation at $25-$30 billion. Sources said Paytm is looking at a valuation of around $20-$22 billion. Paytm was
valued at $16 billion when it raised $1 billion in November 2019.
Paytm’s IPO comes at a time when online food delivery app
Zomato made a stellar debut on Dalal Street with an over Rs 9,000 crore listing in July and Chennai-based Software as a Service (SaaS) company Freshworks
chose to make its public market debut on the Nasdaq stock exchange last month.
Omni-channel beauty and personal care retailer
Nykaa will launch its IPO on October 28, aiming to raise Rs 5,352 crore at a valuation of $7.1 billion. Fintech company
PolicyBazaar is also in the final stages of going public after Sebi approval, while startups like Mobikwik, Oyo Hotels & Homes and Delhivery are in various stages listing on the bourses.