India’s most valuable fintech startup – Paytm confirmed to its shareholders and employees on 6 June 2021 that it will file for an IPO by the first week of July. It is planning to raise about US$ 3 billion at a valuation of up to US$ 30 billion.
Paytm released a letter to shareholders and employees, stating its plans to raise money by issuing fresh equity in the IPO, and also sell existing shareholders’ shares. The startup also offered its employees the option to sell their stakes in the firm. It has received in-principle approval from the board of directors to pursue the public market. However, a formal approval cannot take place until the prospectus is finalized.
Valued at US$ 16 billion, Paytm has raised more than US$ 3 billion to date. Paytm has not yet released the date of filing for the IPO. But it has sought the shareholders’ response to their intention to sell their stakes by the end of the month. The IPO will be managed by Morgan Stanley.
Formally called One97 Communications Ltd., Paytm sent an “offer for sale” letter to its staff.
Contents of the letter: “One97 Communications Ltd. is proposing to undertake an initial public offering of its equity shares (“Equity Shares”), subject to market conditions, regulatory, corporate and other approvals, and other relevant considerations, in accordance with applicable law, and has received in-principle approval from the board of directors of the Company in this regard. The proposed Initial public offering is contemplated to include the fresh issue of Equity Shares by Company and/or an offer for sale of Equity Shares by existing shareholders of the Company,”
Founded in 2010, Paytm is a payment gateway that provides payment services to merchants and consumers. It enables seamless mobile payments from cards, bank accounts, UPI and digital credit among others. It is undoubtedly India’s largest mobile wallet firm. Paytm is owned by one of India’s mobile-internet firms – One97 Communications. It is backed by SoftBank, SAIF Partners, Berkshire Hathaway Inc., Alibaba Group and Ant Financial.
Paytm reported a consolidated loss of US$ 233.6 million for the financial year 2020-2021, down from US$ 404 million a year ago. With Paytm’s competitors like Google Pay and PhonePe gaining popularity, the startup has realigned its payments strategy to assume a leadership position in the merchant payments market. Paytm’s credit tech vertical is also likely to play an important role in the next wave of its revenue growth.
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