Paytm IPO: 45% of Rs 18,300 cr already secured - Anchor round makes it 8th largest private firm IPO in India

Paytm IPO: Digital payments and financial services firm Paytm has confirmed that it has raised Rs 8,235 crore from anchor investors ahead of its initial share sale. With this, Paytm has already secured 45 per cent of its Rs 18,300 crore initial public offer (IPO). Paytm's anchor round's size alone can be termed as the eighth largest private company IPO in India.

Paytm IPO Anchor round

-The anchor investor round saw participation from Blackrock, CPPIB, Birla MF, GIC and other blue-chip funds leading to 10 times oversubscription of the shares, as per a stock exchange filing.

-Blackrock invested Rs 1,045 crore, Canada Pension Plan Investment Board Rs 938 crore and GIC Rs 533 crore.

-The round saw participation from pension funds, superannuation funds as well as sovereign wealth funds like Government of Singapore, CPPIB, ADIA, APG, City of New York, Texas Teachers Retirement, NPS Japan, University of Texas, NTUC Pension out of Singapore, and University of Cambridge.

-The largest dedicated emerging market investors like Standard Life Aberdeen, UBS and RWC have also invested.

Paytm IPO

-One97 Communications, which operates under the Paytm brand name, has announced the country's biggest initial public offer, opening on November 8, in the price band of Rs 2,080-2,150 per share, implying a valuation of around Rs 1.48 lakh crore.

-The Rs 18,300 crore-offer, if successful, will be the biggest in the country after Coal India's IPO back in 2010 wherein the state-owned company had garnered Rs 15,200 crore.

- The IPO -- which will close for subscription on November 10 -- comprises issuance of fresh equity shares worth Rs 8,300 crore and offer for sale (OFS) by existing shareholders to the tune of Rs 10,000 crore.

-The company's IPO price band values it in the range of USD 19.3 - 19.9 billion.

- At current exchange rates, the enterprise value is Rs 1.44 lakh crore to Rs 1.48 lakh crore.

-The company skipped pre-IPO funding round to expedite launch of the initial share sale.

-Through the OFS, One97 Communications Managing Director and CEO Vijay Shekhar Sharma will offload shares worth up to Rs 402.65 crore while Antfin (Netherlands) Holdings will sell shares to the tune of Rs 4,704.43 crore.

-Besides, Alibaba.Com Singapore E-Commerce will sell shares worth Rs 784.82 crore, Elevation CapitalV FII Holdings (Rs 75.02 crore), Elevation Capital V Ltd (Rs 64.01 crore), Saif III Mauritius (Rs 1,327.65 crore), Saif Partners (Rs 563.63 crore), SVF Partners (Rs 1,689.03 crore) and International Holdings (Rs 301.77 crore), as per its offer document.

Paytm's business' financials

- In the financial year 2021, the company reported a gross merchandise value of Rs 4 lakh crore.

-According to research firm Redseer, Paytm has mobile payments transaction volume market share of approximately 40 per cent, and wallet payments transaction market share of 65-70 per cent in India as of FY 2021.

-As per the offer document, demonetisation in 2016 also played a role in pushing merchants to accept payments digitally and led to growth in products like QR and wallets.

Digital push

With several factors, including government initiatives and reforms, improving technology, increasing reach and awareness, digital payments are expected to more than double from USD 20 trillion in FY 2021 to USD 40-50 trillion by FY 2026.