Paytm gears up for mega IPO, files DRHP for Rs 16,600 crore issue

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New Delhi: One97 Communications, the parent company of digital payments platform Paytm, filed its draft red herring prospectus (DRHP) with market watchdog SEBI on Friday.

The Softbank-backed company is looking to raise Rs 16,600 crore via its primary float. The company will issue fresh shares worth Rs 8,300 crore with a face value of Re 1 each, whereas the existing shareholders will offload their stake worth another Rs 8,300 crore.

The company has mentioned itself as a professionally-managed entity with no identifiable promoter. At this issue size, it would be the largest issue of the country.

Existing investors, including founder and CEO Vijay Shekhar Sharma, Antfin (Netherlands) Holdings, Alibaba.com Singapore Pvt Ltd, Elevation Capital, Saif Partners India and Berkshire Hathaway will sell their stakes in the book building process.

The Noida-based company said it would use the IPO proceeds to strengthen its payment ecosystem and for new business initiatives and acquisitions. 75 per cent of the net offer has been reserved for qualified institutional buyers (QIBs). The company may allocate up to 60 per cent QIB portion to anchor investors.

Altogether 15 per cent of the net offer shall be available for allocation on a proportionate basis to non-institutional investors (NIIs) and the remaining 10 per cent shall be available for allocation to retail individual bidders.

The company has also reserved a portion for eligible employees of the company. However, details have not been disclosed in the DRHP.

Shares of Paytm have been on a roll recently in the unlisted market. The adjusted price after stock-split has surged to Rs 2,500-2600 from Rs 950-1,000 in the unlisted market since May 2021. However, all the pre-IPO equity has a lock-in period of one year.

Morgan Stanley India Company, Goldman Sachs (India) Securities, Axis Capital are the joint global coordinators and BRLMs for the issue. ICICI Securities, JP Morgan India, Citigroup Global Markets India and HDFC Bank have been appointed as the BRLMs of the issue.

Link Intime India has been appointed as the registrar for the issue.

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