One97 Communications, the parent company of Paytm, has said that it will sell new shares worth £1.2 billion under its proposed initial public offering (IPO). The issue will also have a secondary component where existing shareholders will decide on the number of shares to be tendered. Announcing an extraordinary general meeting (EGM) on July 12 for approving the IPO, the company has sought shareholders’ approval on a resolution that seeks to declassify founder Vijay Shekhar Sharma as a promoter as it is a professionally managed company.
The EGM notice has been sent to employees of the organisation who are also shareholders. This is the first time that Paytm has confirmed the size of its primary fund raise. The company had earlier written to employees seeking their interest to participate by offering their shares as part of the ‘offer for sale’ (OFS) component in the IPO.
The EGM notice contains several other resolutions pertaining to the listing, additions to articles of association and an amendment to the Employee Stock Option Scheme. It said that the board had in its meeting held on June 14, 2021 approved the IPO, subject to the approval of the members of the company. It also said that no change in control of the company or its management is intended or expected pursuant to the offer.
The equity shares are proposed to be listed on the BSE, the NSE and any other stock exchange as determined by the board. The company has decided to hold an offline EGM, which will take place at Mayur Vihar in New Delhi where most of its shareholders are based. Last week, One97 Communications finalised the bankers for its proposed IPO. The company is understood to have taken on board JP Morgan, Morgan Stanley, ICICI Securities and Goldman Sachs to lead the issue, which is likely to be the largest IPO in the financial sector. With the investment bankers in place, the draft red herring prospectus is set to be filed in July 2021.
According to a Bloomberg report, Paytm is aiming at a valuation of $25-30 billion. There have been other reports estimating the value at around $20 billion as against the earlier one of $15 billion during a fund raise in 2019. Among non-banks, Bajaj Finserv has a valuation of over £19 billion.
