FinTech: Paytm, India’s Leading Digital Payments Provider, Planning $3B IPO
The IPO would be India’s biggest ever.
Paytm, the Indian payments giant backed by investors such as Berkshire Hathaway Inc., SoftBank Group Corp., and Ant Group Co., is weighing an IPO worth $3 billion says a Bloomberg report. The firm is targeting a massive valuation of $25 billion to $30 billion.
The board of the parent company, One97 Communications Limited, is scheduled to meet on Friday to greenlight the IPO, tentatively being planned for the Diwali festival season around November.
However, the exact timing of the issue would depend upon market conditions. Even after the board clearance, the preparation, including the filing of documents and getting approvals can take five-six months, a company source told The Hindu.
A person in the know told Bloomberg confidentially that Morgan Stanley, Citigroup Inc., and JPMorgan Chase & Co. have been shortlisted to manage the floatation of the fintech’s issue of shares.
Paytm has recently diversified beyond payments and financial solutions for consumers, offline merchants, and online platforms. It now also offers other services such as Paytm insurance and Paytm Money.
It is the most valuable Indian unicorn with a valuation of $16 billion according to the Hurun India Unicorn Index 2020. However, it is yet to turn a profit.
In a pre-IPO primer, investment research firm Bernstein said today that Paytm is likely to break even in 12-18 months given financial discipline and strategic investments.
“Paytm has come a long way from a simple digital wallet business to an integrated payments ecosystem. We believe the next stage of growth will be led by financial services, particularly delivering seamless credit tech products to consumers and merchants,” the Bernstein report said.
“With increased financial discipline (rare in the hyper-competitive payments space), it is on track to break even in 12-18 months. We expect Paytm to continue being the largest payments and fintech ecosystem in India,” it added.
Related Story: Indian FinTech Paytm Takes On Google, Alleges “Arm-Twisting”
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