Paytm Owner Success Story: Historic IPO! How son of Aligarh school teacher created India's one of most valued firms

Paytm's Rs 18,300 crore IPO was oversubscribed 1.89 times on the last day of India's biggest share sale, making it one of the country's most valued companies. The initial public offering of Paytm's parent company One97 Communications Ltd received bids for 9.14 crore equity shares against the offer size of 4.83 crore shares, according to information available from stock exchanges.

Paytm: One of India's most-valued firms

Now, Paytm is all set for a bumper listing, likely on November 18, and will be one of India's most valued companies. Paytm had priced its shares in a price band of Rs 2,080-2,150 per share, valuing the company at Rs 1.39 lakh crore at the upper end of the price band. This was greater than previous miner Coal India's Rs 15,000 crore a decade back.

The OFS, or secondary share sale, consisted of the sale of shares worth up to Rs 402.65 crore by founder Vijay Shekhar Sharma. Paytm IPO comprised a fresh issue of equity shares worth Rs 8,300 crore and an offer for sale (OFS) of shares worth up to Rs 10,000 crore. 

Interesting story

But, how Paytm became one of the India's most valued companies. This is a very interesting story.

Launched by a son - Vijay Shekhar Sharma - of a school teacher from a small town Aligarh nearly a decade ago as a platform for cellular recharging, Paytm grew rapidly after ride-hailing agency Uber listed it as a fast cost possibility, as per a PTI report.

Its use swelled in 2016 when a ban on high-value forex financial institution notes in India boosted digital funds.

One97

Incorporated in 2000, One97 Communications is India's leading digital ecosystem for consumers and merchants. It offers a range of services to the users' payment services and financial services.

Paytm's large issue size meant that the sheer value of its retail size is much larger than that seen in recent internet IPOs like that of Zomato or Nykaa, combined.

Huge growth

The company has seen a huge uptick in its revenues driven by its payments and financial services offerings. The company's revenue is up by 46 per cent to Rs 948 crore in Q1FY22, from Rs 649.4 crore in Q1FY21.

It is on the path to profitability as the company has already reported contribution margin profits.

FinServ Giant

Paytm has also grown to be a financial services giant, which brings with it more opportunities. Paytm's payments and financial services alone contribute to almost 80 per cent of its revenue. 

Ant Group-backed Paytm closed India's largest anchor round, raising Rs 8,235 crore from 100 institutional traders, together with the federal government of Singapore, BlackRock International Funds, Canada Pension Plan Funding Board and Abu Dhabi Funding Authority.