The £1.83 billion mega IPO of Paytm’s parent One97 Communications will open on November 8 and close on the 10th. The company cleared the last hurdle for its IPO - a nod to its offer document from the Registrar of Companies. The clearance came on the day Swiss Re announced a £92 million investment in Paytm Insuretech, the holding company for its non-life business, for a 23% stake.
The price range for the shares is likely to be Rs 2,080-2,150. At that price range, the company’s targeted valuation is around $20 billion. The red herring prospectus gives an insight into the company’s financial performance in the first quarter.
According to the document, the company’s revenue is up 46% to £94.8 million in Q1FY22 from £64.9 million in Q1FY21. Paytm’s losses stood at £38.2 million for the three months ended June 2021 following higher employee expenses, which include accounting for ESOPs and an increase in headcount.
Paytm’s user base grew in the first three months of FY22 to 337 million registered consumers and 22 million merchants. The number of monthly transacting users also saw a 33% increase to 57 million as of September 30. Payments and financial services contribute nearly 80% of the revenue for the company. According to the prospectus, the revenue for the first quarter in this segment stood at £68.9 million. The contributing margin, which is a reflection of unit profitability, rose to 27% from 15% a year ago.
The Paytm has hiked its IPO size to £1.83 bn from £1.66 billion as the increased portion will all come in the offer-for-sale (OFS) component with existing shareholders selling more of their shares. The size of the primary offering will remain unchanged at £830 million, while the secondary sale size will now be £1 billion.
The biggest IPO in the history of Indian capital markets so far has been that of Coal India (CIL), which raised £1.55 billion in 2010. The Paytm issue will see the shares of One 97 Communications (Paytm’s parent company) being listed both on the Bombay Stock Exchange and the National Stock Exchange.