PayTm IPO - 7 Things to Know Before Applying for IPO

One 97 Communications (Paytm) has announced its IPO date just 4 days after the SEBI approved its draft red herring prospectus. At Rs.18,300 crore, the IPO will be 22% bigger than the largest IPO till date of Coal India, which raised Rs.15,000 crore in 2010. Here is what you must be aware of.
 

Here are 7 things you need to know about the One97 Communications (Paytm) IPO

1) The IPO will open for subscription on 08-November and close for subscription on 10-November. The price band for the IPO has been set in the range of Rs.2,080 to Rs.2,150 and each market lot will consist of 6 shares.

2) The basis of allotment of the IPO of One97 Communications (Paytm) IPO will be completed on 15-November while the refunds will be initiated on 16-November.

While the shares will be credited to the respective demat accounts on 17-November, the stock will get listed on the NSE and the BSE on 18-November.

3) Paytm has an enviable customer base of nearly 33 crore, or about one-fourth of the Indian population. It also has about 2.1 crore registered merchants on its platform and there are close to 11.5 crore transacting users on the Paytm platform.

Paytm actually pioneered digital money and m-commerce in India in a big way.

4) The original size of the Paytm IPO was Rs.16,600 crore. However, subsequently, the OFS was expanded to take the total issue size to 18,300 crore.

This will comprise of a fresh issue of Rs.8,300 crore and an offer for sale by existing shareholders of Rs.10,000 crore.

5) One97 Communications (Paytm) was originally looking at a higher valuation of $25-30 billion. However, after the first round of road shows, the expected valuation is closer to $20 billion.

As per a report prepared by Kantar Brandz, Paytm has a brand valuation of close to $6.3 billion.

6) Out of the Rs.8,300 crore that will be raised by way of fresh issue, it will invest close to Rs.4,300 crore in strengthening the Paytm ecosystem, customer expansion and deeper penetration into financial services via Paytm Money.

It will also allocate Rs.2,000 crore to inorganic expansion via the acquisition route.

7) Paytm is a loss making company and for FY21 it reported a net loss of Rs.1,701 crore which substantially narrowed from a loss of Rs.2,942 crore in FY20.

The sharp reduction in losses was due to much of its marketing, publicity and advertising expenses getting front-ended. Losses have narrowed by 60% in the last 2 fiscal years.

Paytm has a marquee list of seven merchant bankers while Link Intime will be the registrars to the issue.

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