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Paytm gets shareholders’ nod for ₹16,600 cr IPO; to release DRHP this week – Mint

BENGALURU :

The shareholders of One97 Communications Ltd (OCL), which owns brand Paytm, have approved plans of its 16,600 crore initial public offering (IPO), put to vote at the extraordinary general meeting held on 12 July, according to two individuals aware of the discussion.

OCL will release its draft red herring prospectus (DRHP) later this week, said one of the people quoted above.

OCL will look to raise up to 12,000 crore (roughly $1.6 billion) via fresh issue of shares and another secondary raise of 4,600 crore during its November-end IPO, shareholders agreed.

Mint first reported on 31 May that Paytm was looking to raise $1 billion-$1.5 billion by selling new shares to qualified institutional buyers. The primary issue is solely to infuse growth capital in the 11-year-old entity, people aware of the matter told Mint earlier.

Shareholders also approved the proposal that founder Vijay Shekhar Sharma, would not be identified as the “promoter” of the company. This is to comply with Securities and Exchange Board of India (Sebi) rules requiring promoters of listed firms to have at least 20% of post-issue capital.

Sharma holds 9,051,624 equity shares of OCL, amounting to 14.61% of its total paid-up equity share capital. Sharma will continue to be the chairman, managing director, and chief executive officer (CEO) of the company.

Shareholders also approved the company’s new articles of association, which includes changes to its board, and other rights of shareholders. The changes are to bring the articles closer to a public listed company, a second person said.

At present, Paytm has about 1,000 shareholders, broadly held by various institutional investors, employees, former employees, and others.

Earlier this month, OCL reshuffled its board ahead of the planned IPO, replacing Chinese nationals with Indian and US nationals. OCL brought in Douglas Lehman Feagin, senior vice president, at Ant Group to its board, replacing Ant Group chairman and chief executive officer, Jing Xiandong.

Industry veteran Ash Lilani, managing partner at Saama Capital and who was earlier the head of global markets at Silicon Valley Bank (SVB) was also appointed as an independent director to the company.

Further, Michael Yuen Jen Yao from Alibaba Group Holding Ltd and Todd Anthony Combs, investment manager at Berkshire Hathaway have retired by rotation from OCL’s board on 30 June, as per company filings with the registrar of companies.

Alibaba Group Holding Ltd and its payments arm ANT Financial at present hold almost 37% stake in the payments major, while Softbank, through its Softbank Vision Fund and Elevation Capital (formerly SAIF Partners), holds almost 20% stake each in the entity.

Last week, Mint reported that two senior executives have quit the IPO-bound firm, joining the growing list of top management personnel who have left the company over the past two years.

Amit Nayyar, president at Paytm, who was heading the company’s financial services division, tendered his resignation last month. In June, chief human resources officer Rohit Thakur also exited the company, after an 18-month stint. Earlier this year, Jaskaran Singh Kapany, Paytm’s head of marketing, left the company to join Xiaomi India as its chief marketing officer.

Now existing investors, including Softbank, will look to dilute their stakes during Paytm’s IPO, Mint reported earlier.

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