Alibaba-backed One97 Communications, which owns mobile payments firm Paytm, has received a green nod from its board to go public. In a letter to all its stakeholders and employees having stock options, the company said it had received in-principle approval from its board to issue an IPO.
The proposed IPO is likely to have a combination of new equity shares and an offer for sale (OFS) of equity shares by existing shareholders of the company, as reported by MoneyControl.
The company would soon file its Draft Red Herring Prospectus for the proposed IPO that would double Paytm’s valuations at an estimated $25-$30 billion. The company’s reported revenue is INR 3,186 crore (around $430 million) for the financial year 2020-21, at a loss of $229 million.
Paytm, India’s largest and most valuable FinTech startup is backed by Alibaba and Softbank. The company offers a range of services starting from digital payments to running a payment gateway, stock trading, insurance, and mutual funds. It also runs a payments bank.
Investment banks, including Citigroup, Morgan Stanley, and JPMorgan, are reportedly helping with Paytm’s much-awaited IPO, which is also India’s first Fintech IPO that could put the country in the spotlight for being the FinTech hub of Asia.
Paytm’s IPO also comes amidst a pandemic that led to the acceleration of digital payments in the country. India witnessed the birth of 25 Unicorns in the last 18 months, of which seven odd are FinTech companies.
Founded in 2009 by Vijay Shekhar Sharma, Paytm wanted to be the Alipay of India. It competes with Walmart’s PhonePe, Google Pay, Amazon Pay, and Facebook’s WhatsApp Pay.
It would be interesting to watch how the Fintech sector pans out after Paytm’s IPO, which is being touted as the largest IPO so far. A few other Fintechs such as Mobikwik and PolicyBazaar have also hinted about going public soon.