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The board of One97 Communications, the parent firm of India’s leading digital payments player Paytm is learnt to have given an in-principle approval for an initial public offering, according to sources familiar with the development, setting the stage for what is likely to one of India’s largest public offerings.
The eight member board met on 28th May, 2021 to give their approval for a $3 billion initial public offering (IPO), making it the biggest in India’s history. It is aiming to list in India in November this year at a valuation of $25-$30 billion. The company was last valued at $16 billion when it raised $1 billion from Softbank and Ant Financial in 2019.
Currently one of the leading players in the digital payments space, Paytm 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.
For the year FY20, it posted revenues of Rs 3,280 crore while its losses shrank 30% to Rs 2,942 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%.
The company did not comment for this story.
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.