Indian payment group Paytm has held a general meeting of shareholders next month to approve what is known as the country’s largest initial public offering and plans to raise up to US$3 billion.
According to people familiar with the matter, the group is backed by China Ant Group and Japan’s SoftBank, and has appointed JPMorgan Chase, Morgan Stanley, Goldman Sachs and India ICICI Securities to lead the issuance. The goal of this offering is Paytm’s valuation of US$29 billion.
With the business from digital payment to banking, Paytm was valued at US$16 billion in the last round of financing in 2019, and it has long been a successful case of India’s booming technology industry.
But it was replaced by edtech this month as India’s most valuable startup Baiju’s.
It also faces fierce competition from online payments from Western competitors such as Google Pay and PhonePe, a service provided by Walmart’s Indian e-commerce platform Flipkart.
Five years ago, “Paytm ruled India and it was in a dominant position,” said Neil Shah, an analyst at technology research company Counterpoint. “But it’s still bleeding.
“Now is the right time for an IPO, because competition is rapidly increasing and preference for Paytm is declining; the IPO may have an impact on their competition,” he said.
As a generation of Indian technology start-ups mature, several other unicorn companies are also considering going public this year.
Takeaway company Zomato submitted a draft prospectus Seeking to capitalize on India’s dramatic increase in online deliveries during the coronavirus pandemic in April.
Insurance aggregator Policybazaar and beauty e-commerce site Nykaa also stated that they are considering listing, as is Wal-Mart’s Flipkart.
Under the leadership of its co-founder and CEO Vijay Shekhar Sharma, Paytm was one of the first companies to target digital payments and now has approximately 150 million monthly active users.
But Paytm has been striving to make a profit, even though it has narrowed its losses for two consecutive years.
Last year, Paytm reported a loss of 17 billion rupees ($230 million), compared with 29 billion rupees the year before.
Cyril Amarchand Mangaldas’ capital markets lawyer Gokul Rajan said: “We are seeing many start-ups considering listing in India, partly because of high global liquidity.”
He said that compared with overseas issuance or special purpose acquisition companies, many companies also regard domestic listings regulated by the Securities and Exchange Commission of India as the “most viable option.”
“Sebi regulations allow non-profit companies to conduct IPOs, and Indian unicorns are moving closer to the US market, and their valuations are based on their potential rather than historical results,” he said.
Over the years, Paytm’s Sharma is no stranger to controversy.He was involved in a Blackmail scandal In 2018, he accused his head of public relations of trying to blackmail $2.7 million.
The Chief Executive has been strongly criticizing “Arbitrary power and influence“And supports New Delhi’s ban on Chinese apps, even though his biggest investor is Chinese.
He once said on Twitter that this is “Time of the best Indian entrepreneurs Come forward and build the best Indians for Indians! “
Additional reporting by Hudson Lockett in Hong Kong