The Initial Public Offering (IPO) of One97 communications, the parent company of Paytm, opened on Monday, November 8. The company is looking to raise Rs 18,300 crore, which was revised upwards from Rs 16,600 crore. The price band for the shares has been set at Rs 2080-Rs 2150. The lot size is six, with a minimum investment of Rs 12,480. One can bid for a maximum of 5 lots. The company skipped the pre-IPO funding round to expedite launch of the initial share sale.
As of 1.35 pm, only 7% of the shares had been subscribed to. According to the NSE, investors have bid for 33.98 lakh shares out of a total of 4.83 crore. The retail portion has been subscribed 0.38 times.
Seventy-five percent of the IPO is reserved for qualified institutional buyers (QIB), 15% for non-institutional investors (NII) and 10% for retail investors. As per NSE data, there has been some bidding from QIBs and NIIs, but it is a miniscule portion.
> The company’s IPO will open from November 8 to November 10. The company’s fresh issue is Rs 8,300 crore and its offer for sale, or OFS, where existing shareholders sell their shares, is Rs 10,000 crore. CEO Vijay Shekhar Sharma will offload shares worth up to Rs 402.65 crore while Antfin (Netherlands) Holdings will sell shares to the tune of Rs 4,704.43 crore.
Alibaba.com Singapore E-Commerce will sell up to shares worth Rs 784.82 crore, Elevation CapitalV FII Holdings (Rs 75.02 crore), Elevation Capital V Ltd (Rs 64.01 crore), Saif III Mauritius (Rs 1,327.65 crore), Saif Partners (Rs 563.63 crore), SVF Partners (Rs 1,689.03 crore) and International Holdings (Rs 301.77 crore), as per the offer document.
> Paytm’s IPO, if successful, will surpass the record held by Coal India. The government-owned coal mining and refining corporation had raised Rs 15,000 crore in 2010.
> Of the portion set aside for anchor investors, Paytm had raised over Rs 8,235 crore, the company said in a regulatory document on November 3. It raised the amount from 122 anchor investors, allocating 3.83 crore shares at Rs 2,150 a share. A chunk of the shares set aside have been picked up by BlackRock Global Funds and Canada Pension Plan Investment Board. With this anchor round, 45% of the issue is already subscribed
> The company has proposed to use Rs 4,300 crore for growing and strengthening the Paytm ecosystem, including through acquisition of consumers and merchants and providing them with greater access to technology and financial services. Paytm plans to earmark Rs 2,000 crore for business initiatives, acquisitions and strategic partnerships and up to 25% of the total fund raised through the IPO for general corporate purposes.
> As per the offer document, demonetisation also played a role in pushing merchants to accept payments digitally and led to growth in products like QR and wallets. With several factors, including government initiatives and reforms, improving technology, increasing reach and awareness, digital payments are expected to more than double from $20 trillion in FY 2021 to $40-50 trillion by FY 2026.
Paytm’s IPO comes after successful IPOs by several of India’s internet startups, including Zomato, Nykaa parent company FSN e-commerce, Fino Payments Bank, and Policybazaar parent entity PB Fintech. Nykaa’s IPO was subscribed 81.78 times on the final day.