Paytm in talks with sovereign wealth funds, BlackRock for IPO stakes

State-backed wealth investors Abu Dhabi Investment Authority and Singapore's GIC Pte are among those weighing bidding to participate in the IPO, sources said

India’s Paytm is in talks with sovereign wealth funds and financial firms to become anchor investors in its upcoming initial public offering, according to people familiar with the matter. 
 

State-backed wealth investors Abu Dhabi Investment Authority and Singapore’s GIC Pte are among those weighing bidding to participate in the IPO, the people said, asking not to be identified as the information is private.

Global financial firms such as BlackRock Inc. and Nomura Holdings Inc. are also in discussions to bid, the people said. One97 Communications Ltd., as Paytm is formally known, is considering seeking a valuation of around $20 billion to $22 billion based on initial investor feedback, they said.

There are already more than enough bids to cover the shares allocated for anchor investment in the IPO, the people said. 

While the draft preliminary prospectus was filed in July, it is still awaiting approval from the Securities and Exchange Board of India, one of the people said. 

Negotiations are ongoing and other bidders could emerge for the stakes, the people said. A representative for Paytm declined to comment, while ADIA, BlackRock, GIC and Nomura didn’t immediately respond to requests for comment.

India’s market for first-time share sales is surging on debuts of tech firms like Zomato Ltd.’s $1.3 billion offering. The amount of money raised in IPOs this year has reached $10.8 billion, according to data compiled by Bloomberg. At the current pace, 2021 would exceed the all-time record of $11.8 billion.

Paytm, backed by SoftBank Group Corp., Berkshire Hathaway Inc. and Jack Ma’s Ant Group Co., plans to raise as much as 166 billion rupees ($2.2 billion) from its share sale, according to its draft prospectus.

Led by founder and Chief Executive Officer Vijay Shekhar Sharma, Paytm has expanded beyond digital payments into banking, credit cards, financial services and wealth management. It also supports India’s financial payments backbone, the Unified Payments Interface or UPI. 

In fintech, Paytm has fended off stiff competition from a swath of global players and has the biggest market share of India’s merchant payments, with over 20 million partners in its network. Its users make 1.4 billion monthly transactions, according to numbers in a recent company blog post.

--With assistance from Elffie Chew, Pei Li, Anto Antony and Nicolas Parasie.