Markets regulator Sebi has cleared the £1.66 billion initial public offer of One97 Communications, the parent company of Paytm. This would make the IPO the largest ever in India. The company is understood to be targeting a listing in November.
According to the draft IPO documents filed by the company, One97 Communications plans to raise £830 million through fresh issue of equity shares and another £830 million through the offer- for-sale (OFS) route.
The £1.66 billion offer will make Paytm IPO the largest listing after public sector miner Coal India’s £1.59 billion IPO in 2010 and Reliance Power in 2008. Zomato’s £937.5 million IPO this year was the biggest public offering in more than a decade. The success of Zomato’s IPO has raised hopes for new age companies that are focused more on achieving scale than bottom line.
The success of the IPO would depend on the support it receives from international investors given the scale of the offering. The company is looking at a valuation of $20-22 billion. If the company succeeds in getting this valuation, it will be in the same league as Tata Steel or Tata Motors with valuations of around £16 billion each. Some bankers estimate that the IPO could result in foreign inflows of over $2 billion.
One97 Communications was set up as a search service in 2001 by Vijay Shekhar Sharma. It used the Paytm brand as it moved into recharge services.The company expanded into the digital wallet space and later into QR-based payments. During demonetisation, it rapidly scaled up its business and today has the larger share of merchant payments in terms of the number of merchants.
