Paytm, India’s digital payments pioneer backed by SoftBank Group Corp., received approval from the markets regulator that clears the way for its planned $2.2 billion initial public offering.
The Securities and Exchange Board cleared the IPO, which will be India’s biggest so far, on Friday, according to people familiar with the matter. The company could list in Mumbai by mid-November, they added, asking not to be identified as the information isn’t public.
The Noida-based firm, which is also backed by Berkshire Hathaway Inc. and Jack Ma’s Ant Group Co., hopes to tap strong investor demand that’s sent the shares of fellow unicorn Zomato Ltd. soaring after its July listing. Formally called One97 Communications Ltd., if Paytm achieves its Rs 16,600 crore ($2.2 billion) IPO target, it would surpass the more than Rs 15,000 crore raised by state-owned Coal India Ltd. in 2013.
Paytm said in its draft prospectus that it plans to sell an equal number of new and existing shares.
The firm has the biggest share in India’s merchant-payments market, with over 20 million merchant partners in its network. Its users make 1.4 billion monthly transactions, according to numbers in a recent company blog post.
The company is planning to skip the pre-IPO share sale rounds to fast-track listing. The company's plan of shelving the pre-IPO raise is not related to any valuation differences, a source added.
Paytm is looking at a valuation of Rs 1.47-1.78 lakh crore. US-based valuation expert Aswath Damodaran, who is a professor specialising in finance at the Stern School of Business at New York University, has valued the unlisted shares of the firm at Rs 2,950 apiece.
A source told Reuters in July that Paytm was likely to break even in 18 months.
Several first-generation homegrown startups in India are preparing to go public on domestic bourses, following on the heels of food delivery firm Zomato which made a stellar stock market debut in July and which also counts China's Ant Group as a shareholder.
Ant Group, with a roughly 30% stake, is Paytm's largest shareholder.
Launched a decade ago as a platform for mobile recharging, Paytm grew quickly after ride-hailing firm Uber listed it as a quick payment option. Its use swelled further in 2016 when a ban on high-value currency bank notes boosted digital payments.
Paytm has since branched out into services including insurance and gold sales, movie and flight ticketing, and bank deposits and remittances.