The IPO was originally planned at Rs 16,600 crore, but existing shareholders, including Alibaba’s Ant Group and SoftBank, decided to sell more shares through an offer-for-sale (OFS)
“It is an incredible day for digital India that a new-age company can go to the public market with an issue of that size, potential, opportunity to list or raise money from!” said Vijay Shekhar Sharma, Chief Executive Officer of Paytm.
One 97 Communications, the parent company of Paytm, on Thursday announced the biggest public offering ever of Rs 18,300 crore, topping the Rs 15,000-crore IPO of Coal India, which was over a decade ago. The IPO is all set to open for subscription on November 8. The IPO was originally planned at Rs 16,600 crore, but existing shareholders, including Alibaba’s Ant Group and SoftBank, decided to sell more shares through an offer-for-sale (OFS).
Sharma said that Paytm would become the absolute go-to platform for living a far more productive, far more yield generating and a far more efficient financial life. “However, life for us now will be QSQT – quarter se quarter tak,” he said during the IPO announcement.
The price band of the IPO has been fixed at Rs 2,080-2,150 per share of the face value of Rs 1 each. After the IPO, the fintech will be valued at $19.5 billion-$20 billion, the company officially said for the first time on Thursday. The company was at $16 billion during the last fundraiser, two years ago. “The valuation lies in the eyes of the money holder. It has been a humbling experience and we are, in fact, sticking to the lower end of the price band because we want maximum participation for this offering,” Sharma said.
Despite profitability not looking like a near-term goal for this Rs 47,000-crore brand, said Madhur Deora, Group President and Chief Financial Officer
Sharma pointed out that the euphoria among investors for a market like India was a never-before opportunity for the country’s startups and other companies. The spree of investments in India’s tech ecosystem were unparalleled. “I have seen the dotcom boom, the e-commerce craze, but the traction this time is unprecedented,” he said.
The payments unicorn claims to have become contribution margin neutral, meaning it is recouping its cost from operation revenue. The company’s contribution margin grew 198% to Rs 245 crore in Q1FY22 compared with the corresponding quarter in the previous financial year. Despite profitability not looking like a near-term goal for this Rs 47,000-crore brand, said Madhur Deora, Group President and Chief Financial Officer. He also said that the company had reported healthy financial numbers during the pandemic and that investments in technology, business expansion, and recruiting talent would continue.
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