IPO on 8th November 2021
The public issue comprises issuance of fresh equity shares worth ₹8,300 crore and Offer for Sale (OFS) by existing shareholders to the tune of ₹10,000 crore. Paytm's IPO is likely to be the biggest in the country's corporate history, breaking a record held by Coal India Ltd, which raised over ₹15,000 crore more than a decade earlier.As per market observers, Paytm shares premium has slipped in the grey market, and commanding a GMP of ₹62 today. The shares of the company are expected to list on leading stock exchanges BSE and NSE on November 18, 2021.
“While valuations may appear to be expensive, Paytm has become synonymous with digital payments through mobile and is the market leader in the mobile payment space. Patym is well positioned to benefit from the exponential 5x growth in mobile payments between FY2021 – FY2026 and hence believe that the valuations are justified. We recommend investors to SUBSCRIBE to the issue," said Jyoti Roy - DVP- Equity Strategist, Angel One.
Paytm plans to use proceeds of the fresh issue to grow its business lines and acquire new merchants and customers. The company skipped pre-IPO funding round to expedite launch of the initial share sale.
The growth shown by the revenue and loss ratio of Paytm doesn’t seem to be excited. However, company is being successful in narrowing its losses by restricting the branding expenses. Acquiring new merchants and customers will decide the further growth trajectory. The dependency of Paytm on payment services for majority of revenue is a key matter of concern. Keeping in view of overall business model, we advice investors to subscribe the issue," said Ravi Singhal, Vice Chairman, GCL Securities.
One 97 communications (Paytm) is India’s leading digital ecosystem for consumers and merchants. It is the largest payments platform in India, with a GMV of around ₹4 lakh crore in FY21. As of June 30, 2021, it offers payment services, commerce & cloud services, and financial services to 33.7 crore consumers & over 2.2 crore merchants.
Analysts at Choice Broking have recommended to subscribe for long term on the back of large market opportunities, product and technology DNA, leadership and culture. Though, the brokerage sees fast changing technological and services landscape in the payment services domain, revenue concentration risk, declining operational efficiencies and continued higher losses as key risks and concerns.
Competitive strengths
- India's leading digital payment service platform.
- Strong brand identity with a brand value of US$6.3 billion.
- Large customer base with 333 million total customers, 114 million annual transacting users, and 21 million registered merchants.
- Paytm Super-app to access a wide range of digital payment services over mobile phones.
Company Promoters:
Paytm is a professionally managed company with no identifiable promoters.
Company Financials:
Summary of financial Information (Restated Consolidated)| Particulars | For the year/period ended (₹ in million) |
|---|
| 30-Jun-21 | 30-Jun-20 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 |
| Total Assets | 94,590 | 102,777 | 91,513 | 103,031 | 87,668 |
| Total Revenue | 9,480 | 6,494 | 31,868 | 35,407 | 35,797 |
| Profit After Tax | (3,819) | (2,844) | (17,010) | (29,424) | (42,309) |
Objects of the Issue:
The net proceed from the IPO will be utilized towards the following purposes;
- Growing and strengthening Paytm ecosystem, including through acquisition and retention of consumers and merchants and providing them with greater access to technology and financial services - ₹ 4,300 Crores
- Investing in new business initiatives, acquisitions and strategic partnerships - ₹ 2,000 Crores
- General corporate purposes
Paytm IPO Details
| IPO Opening Date | Nov 8, 2021 |
| IPO Closing Date | Nov 10, 2021 |
| Issue Type | Book Built Issue IPO |
| Face Value | ₹1 per equity share |
| IPO Price | ₹2080 to ₹2150 per equity share |
| Market Lot | 6 Shares |
| Min Order Quantity | 6 Shares |
| Listing At | BSE, NSE |
| Issue Size | [.] Eq Shares of ₹1
(aggregating up to ₹18,300.00 Cr) |
| Fresh Issue | [.] Eq Shares of ₹1
(aggregating up to ₹8,300.00 Cr) |
| Offer for Sale | [.] Eq Shares of ₹1
(aggregating up to ₹10,000.00 Cr) |
Paytm IPO Tentative Timetable
The Paytm IPO open date is Nov 8, 2021, and the close date is Nov 10, 2021. The issue may list on Nov 18, 2021.
| IPO Open Date | Nov 8, 2021 |
| IPO Close Date | Nov 10, 2021 |
| Basis of Allotment Date | Nov 15, 2021 |
| Initiation of Refunds | Nov 16, 2021 |
| Credit of Shares to Demat Account | Nov 17, 2021 |
| IPO Listing Date | Nov 18, 2021 |
Paytm IPO Lot Size
The Paytm IPO market lot size is 6 shares. A retail-individual investor can apply for up to 15 lots (90 shares or ₹193,500).
| Application | Lots | Shares | Amount (Cut-off) |
|---|
| Minimum | 1 | 6 | ₹12,900 |
| Maximum | 15 | 90 | ₹193,500 |
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