IPO-bound Paytm to expand ESOP pool to 61 mn shares through EGM on Sep 2

The startup is backed by Berkshire Hathaway Inc. and Jack Ma's Ant

Paytm, the Indian digital payments pioneer backed by SoftBank Group Corp., will seek shareholders’ approval to appoint Ant Group Co. executive Douglas Feagin to its board as it prepares for India’s largest initial public offering.
 

The startup backed by Berkshire Hathaway Inc. and Jack Ma’s Ant is calling an extraordinary meeting Sept. 2 to get shareholders to vote on the Ant international chief’s appointment as a replacement for Ant Chairman Eric Jing. Paytm also seeks to add two other directors: former Whatsapp chief business officer Neeraj Arora and Ashit Ranjit Lilani, managing partner of Saama Capital.

It will also seek a sharp increase in its employee stock ownership plan to 61.09 million equity options, according to a shareholder memo seen by Bloomberg News. That’s more than double the currently budgeted 24.09 million, an increase intended in part to reward and retain talent as competition intensifies across India’s booming tech industry. At the meeting, Paytm will also seek the greenlight to revise co-founder Vijay Shekhar Sharma’s employment as chief executive officer, the memo said without elaborating.

Paytm is putting the pieces in place for a milestone 166 billion rupee ($2.2 billion) IPO that’s likely to be the largest in Indian history when it goes ahead later this year. Formally called One97 Communications Ltd., Paytm hopes to tap the same strong investor demand that propped up fellow unicorn Zomato Ltd.’s hugely popular share sale. That’s despite the company reporting last month a 10% drop in revenue during the year ended March 2021, after intensifying competition from Walmart Inc.’s Flipkart and Amazon.com Inc. cut its e-commerce and cloud sales by the same amount. Its core payment and financial services arm, however, grew 11%.

Paytm hopes to capitalize on the rising popularity among investors of internet-based consumer companies, after the pandemic fueled the worldwide adoption of digital technologies. BlackRock Inc. and Fidelity International Ltd. were among the dozens of anchor investors that piled into Zomato’s float, resulting in the company receiving about 35 times more bids than it had expected to sell, people with knowledge of the matter said earlier.

Paytm was last valued at $16 billion, according to researcher CB Insights. If it hits its target, the debut would surpass the more than 150 billion rupees raised during state-owned Coal India Ltd.’s IPO of 2010.