Country’s Biggest IPO will Come: Paytm will Bring a Public Issue of Rs 16,600 Crore

One97 Communications, the parent of financial technology company Paytm, has given DRHP(Draft Red Herring Prospectus) to SEBI to raise Rs 16,600 crore from the stock market
Country’s Biggest IPO will Come: Paytm will Bring a Public Issue of Rs 16,600 Crore
Image Credit: The Financial Express
  • The company will raise Rs 8,300 crore by selling new shares.
  • Existing investors will be able to sell shares worth Rs 8,300 crore

One97 Communications, the parent of financial technology company Paytm, has given DRHP(Draft Red Herring Prospectus) to SEBI to raise Rs 16,600 crore from the stock market. The company will raise Rs 8,300 crore by selling new shares through this issue, while its existing investors will be able to sell their shares worth Rs 8,300 crore.

Losses come down to Rs 1,701 crore

This will be the largest public issue in the country, the record of which is currently with Coal India. A decade ago, this government company had brought an IPO of Rs 15,000 crore. Significantly, in the financial year 2020-21, the company's income was Rs 3,186 crore, while it earned Rs 3,540 crore in the previous year. Last fiscal, the company's loss had come down to Rs 1,701 crore from Rs 2,942 crore a year ago.

Policybazaar and Nykaa may also bring IPO

For some time now, there has been competition among internet companies to raise money from the stock market. Food aggregator, Zomato's issue is closing today, while digital payments company MobiKwik has given the DRHP of its issue to SEBI. Insurance aggregator PolicyBazaar and lifestyle retailer Nykaa may also launch IPOs to take advantage of the positive response from institutional and foreign investors and positive market sentiment.

Proposal to sell new shares worth Rs 12,000 crore

The shareholders of Paytm had approved in the recent meeting (EGM) a proposal to raise Rs 12,000 crore by selling new shares. The company's IPO will also have a secondary offer in which existing investors will be able to sell their shares, taking the total size of the issue to Rs 16,600 crore.

Sharma will continue as CMD and CEO of the company

Image Credit: StartupLanes.com
Image Credit: StartupLanes.com

Paytm founder and CEO Vijay Shekhar Sharma holds less than 20% stake in the company, so the shareholders had also approved the proposal to remove him from the promoter category. At present, Sharma, who holds 14.61% stake in Paytm, will continue to be the chairman, managing director (CMD), and chief executive officer (CEO) of the company.

ESOP of 5,44,870 equity shares to employees

Prior to the IPO, Jing Xiandong of Ant Group stepped down from the board of directors of One97. He has been replaced by Douglas Lehman Feijin, senior vice president of Ant Group in the US. The shareholders had approved the proposal to allot 5,44,870 equity shares as ESOPs to former and existing employees along with changes in the board.

In 2010, there was a plan to raise only 120 crores

One97 was started by Vijay Shekhar Sharma in 2000. The company had earlier planned for listing in 2010. Then she was thinking of raising only Rs 120 crore. According to the exchange rate at that time, this amount is $ 28 million. In view of the volatility in the market, the company changed that intention.

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