Paytm raises IPO size to Rs 18,300 cr; Ant to offload shares worth Rs 5K cr

Digital financial services platform Paytm has raised its initial public offering (IPO) size to Rs 18,300 crore from the earlier Rs 16,600 crore, said sources in the know.

Roughly half of the offer for sale (OFS) in Paytm’s IPO, which recently got approval from the Securities and Exchange Board of India (Sebi), will be done by Chinese investor Ant Financial. The OFS size will now inch up to Rs 10,000 crore, which means that Ant Financial will offload shares worth Rs 5,000 crore, sources confirmed.

In the draft red herring prospectus filed by the company, the OFS size was Rs 8,300 crore, and roughly the same amount was being raised via a fresh issue of shares.

“While 50 per cent of the OFS is by Ant Financial, the remaining is by Alibaba, Elevation Capital, SoftBank, and other existing shareholders,” said a source.

• OFS size to increase to about Rs 10,000 crore from Rs 8,300 crore
• Ant Financial will offload shares worth Rs 5,000 crore
• Company eyeing a valuation of $20-22 billion
• Increasing IPO size won’t require fresh permission

Sources said Paytm’s valuation and price band would be intentionally kept in such a range that these would offer ample opportunities of value creation for new investors as well as leave enough money on the table.

The company is eyeing a valuation of $20-22 billion, sources said. Paytm was valued at $16 billion when it raised funds two years ago.

Paytm has built a multi-stack architecture through the payment options offered by the company — Paytm Wallet, Paytm UPI, Paytm Postpaid (Buy Now, Pay Later), credit cards/debit cards, Paytm PoS, All-in-One QR code, and Soundbox, among others.

Paytm has also decided not to go ahead with its pre-IPO share sale. It had plans to raise as much as $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.

As of FY21, its revenue from operations stood at Rs 2,800 crore from 114 million annual transacting users and it had facilitated 7.4 billion transactions, including transactions made to merchants via its ecosystem and peer-to-peer payments, according to the DRHP.