The Rs 18,300 crore initial public offering (IPO) of Paytm, which is the country’s leading digital payments platform, opened for subscription today. Paytm’s public offering is the largest-ever public issue in the country, even higher than Coal India’s IPO of more than Rs 15,000 crore a decade ago.
The 3-day public issue opened today for subscription and will close on Wednesday. The price band of the IPO has been set at Rs 2080-2,150 per share and investors can bid for a minimum of six shares under one lot for Rs 12,900. Investors can buy a maximum of 15 lots for Rs 1,93,500.
As of 11 am, the total subscription on day one stood at 6 percent and 34 percent of the retail portion was booked.
At the time of writing this article, Paytm shares were trading at a premium (GMP) of Rs 150 on the grey market, which is the unofficial platform where unlisted shares trade before listing.
KEY DETAILS ABOUT PAYTM IPO
The Paytm IPO comprises a fresh issue of shares worth Rs 8,300 crore and an offer for sale (OFS) by existing shareholders to the tune of Rs 10,000 crore. The IPO is likely to be listed on the bourses on November 18.
Some of the top shareholders who will sell their stake as part of the OFS are CEO Vijay Shekhar Sharma, Softbank, Ant Group, Alibaba and Elevation Capital. Some of the other shareholders who will sell their stake as part of the OFS are Mountain Capital Fund LP, RNT Associates, DG PTM LP and other individual shareholders.
It may be noted that Paytm has already raised Rs 8,235 crores from anchor investors, including Blackrock Global Funds, Canada Pension Plan Investment Boards (CPPIB), Birla MF, GIC and other investors.
The diversified online payments platform plans to use the proceeds from the issue for a range of activities including growing and strengthening its platform. New acquisitions, retention of customers and merchants and providing “greater access to technology and financial services” are some of the areas where the company plans to spend funds raised from the IPO.
The remainder of the funds will be used for general corporate activities.
It is worth mentioning that up to 75 percent of the offer has been reserved for qualified institutional buyers (QIBs), 15 percent for non-institutional investors (NICs), and the remaining 10 percent for retail investors.
Morgan Stanley India Company, Goldman Sachs (India) Securities, Axis Capital, ICICI Securities, JP Morgan India Private Limited, Citigroup Global Markets India Private Limited, and HDFC Bank are the book running lead managers to the public issue. Link Intime India will be the registrar of the issue and will be responsible for the allotment process.
Paytm’s parent firm, One97 Communications, was founded by Vijay Shekhar Sharma in 2000 and it has emerged as India’s leading digital payment service platform. While it began its journey as a value-added services provider, it now provides a wide range of financial services besides doubling up as an online mobile wallet and payments platform.