Paytm IPO Analysis: BUSINESS OVERVIEW, RELEASE DATE, GMP, PRICE BAND
According to Bloomberg, Paytm, India’s foremost digital payments company plans to raise $3 billion (about Rs 21,800 crore) in an initial public offering (IPO) later this year in India, which would be the country’s largest public offer launch ever in India.
If the Paytm IPO is successful, it would beat Coal India’s IPO in 2010, which generated Rs 15,000 crore in the country’s largest IPO to date. The float is likely to be a combination of fresh stock issuance and existing investor share sales. Morgan Stanley is a prominent candidate. The business is in negotiations with a number of investment banks. Paytm is said to be planning to go public in November and to begin the IPO process next month or in July.
What is Paytm?
Paytm (a partial acronym for “pay through mobile”) is a financial technology and e-commerce payment system startup based in Noida, Uttar Pradesh, India. Paytm is currently available in 11 Indian languages and offers online services such as mobile recharges, utility bill payments, travel, movie, and event bookings, as well as in-store payments using the Paytm QR code at grocery stores, fruits and vegetable shops, restaurants, parking, tolls, pharmacies, and educational institutions. Paytm is worth $25-$30 billion (2 lakh crore) as of June 2021.
Paytm was started in August 2010 in Noida, India’s capital city, with an initial investment of $2 million by its creator Vijay Shekhar Sharma. It began as a prepaid mobile and DTH recharge platform, but in 2013 it expanded to include data cards, postpaid mobile, and landline bill payments.
Paytm is India’s most popular mobile commerce and payment platform. Using the Paytm Wallet, we can enable you to send money to anyone quickly and for free. This money may subsequently be used to pay for things like taxis and vehicles, groceries, restaurants, coffee shops, multiplexes, parking, pharmacies, hospitals, and Kirana shops, among other things.
On the Paytm app or website, you may use it to pay for online recharges, utility bill payments, and movie or travel ticket bookings, among other things.
Financial points of Paytm IPO ?
When Indo-China tensions peaked last year, Vijay Shekhar Sharma’s Paytm was caught in the crossfire over the roughly 40% shareholding owned by Chinese enterprises. Sharma has recently pushed for the development of indigenous technology while forming a start-up coalition against large tech companies such as Google and Apple over increased in-app payment rates for developers.
Ali Baba and Ant Financial, two of its Chinese backers, are expected to withdraw or decrease their stake during the offering, according to persons familiar with the situation. Paytm is owned by Ant Financial and Ali Baba, who together own 37 per cent of the company, with SoftBank owning 20 per cent and SAIF Partners owning 19 per cent.
| Paytm shareholding distribution | |
| Shareholders | Percentage sate % |
| Vijay Shekhar Sharma | 14.8 |
| Ant Financial | 29.7 |
| SoftBank | 19.6 |
| SAIF Partners | 18.6 |
| Ali Baba | 7.4 |
Berkshire Hathaway, AGH Holding, T Rowe Price, and Discovery Capital all own less than 10% of the firm.
With over 1.4 billion monthly transactions, Paytm claims to be 30-50 per cent larger than smartphone applications in the market.
In the fiscal year 2019-20, the firm claimed a 40% decrease in loss and a 40% rise in sales to 3,629 crores compared to the previous year.
To fulfil legal obligations in India, Paytm’s public market debut will contain a mix of new and existing shares, as well as a partial exit for some current investors. Morgan Stanley, Citigroup Inc, and JPMorgan Chase & Co have been nominated as advisers for this IPO, with Morgan Stanley being the frontrunner. The initial public offering (IPO) is planned to begin in late June or early July.
In February 2021, the firm completed over 1.2 billion monthly transactions spanning physical and online payments as well as financial services, with over 150 million monthly active customers throughout its financial services. Paytm processed 975 million digital transactions in March across all of its services, including Paytm Wallet, Paytm FASTag, Paytm UP, and online banking.
In March, Paytm Payments Bank set a new monthly milestone by opening over 1 million new savings and current accounts, bringing the total number of bank accounts to 64 million. It also topped beneficiary banks on the UPI platform, with 469.8 million transactions processed in March and 430.04 million in April.
Paytm’s revenues fell slightly in fiscal year 2021, from INR 3,391 Cr to INR 3,350 Cr, compared to INR 3,391 Cr in fiscal year 2019. However, its operational share grew marginally from INR 3,049 Cr in FY2019 to INR 3,115 Cr in FY2020. The firm’s losses decreased by 28% in the past fiscal year, from INR 3,954 C to INR 2,833 Cr, while the firm cut its expenditure by 19%. The company’s expenditure decreased from INR 7,254 crores in FY19 to INR 5,861 crores in FY20.
Paytm IPO details:
| IPO Opening Date | 2021 (?) |
| IPO Closing Date | 2021 (?) |
| Issue Type | Book Built |
| Face Value | ? per share |
| IPO Price | ? to? per equity share |
| Market Lot | ? |
| Min Order Quantity | ? |
| Listing At | BSE, NSE |
| Issue Size | $3 billion (about Rs 21,800 crore) |
What would be the price band of the Paytm IPO?
Procedural book-building methods will decide the pricing range for Paytm’s offer. The company has yet to decide on an issue price and make it public.
We will update the page as soon as we obtain price information from a trusted source.
Morgan Stanley, Citigroup Inc, and JPMorgan Chase & Co have been nominated as advisers for this IPO, with Morgan Stanley being the frontrunner. They will be the book building issue’s book formulating lead chiefs.
What would be the Grey Market Premium of Paytm IPO?
Paytm stock has been in high demand in the grey market since the announcement of its initial public offering (IPO). The stock price has surged to Rs21,000 from Rs11,500 in the last four days. Investors continue to be prepared to pay a premium over current pricing. (The data is as of 03/06/2021)
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What will be the release date for Paytm IPO?
Officials have yet to announce a particular date for the Initial Public Offer, although it is expected to be issued soon. After the pandemic situation has settled down, the IPO is planned to be launched in 2021.
However, as we receive more accurate information about the date, we will notify you.
How to apply for Paytm IPO?
You may now apply for the IPO through Zerodha, Upstox, or any other broker using the regular IPO application process; if you don’t know how to apply for an IPO, visit our article on ‘Easy Step by Step guide apply for IPO in India.’
However, earning an IPO allocation is similar to winning the lottery, and it all depends on your luck. If you obtain an IPO allocation, read our blog on ‘How to make money using IPO in India.’
Select the Auto Pay option while filling up your UPI ID application since IPO applications are subject to a cash block with the bank account.
Conclusion:
Paytm’s IPO aspirations come at a time when many other major Indian businesses are also considering it. Zomato, a food aggregator, and CarTrade, an auto classifieds firm, have both filed draught red herring prospectuses (DRHPs) for their IPOs this year, while gaming company Nazara Technologies and online travel agency (OTA) EaseMyTrip have already gone public. This year’s applicants include epharmacy firm PharmEasy, cosmetics eCommerce company Nykaa, and insurtech venture PolicyBazaar.
