There is a stir about the digital payment and financial services company Paytm’s IPO. The company is getting demand from Sovereign Wealth Funds (SWFs) and Foreign Institutional Investors (FIIs) at valuations of $20-22 billion. Paytm is working on a plan to launch an IPO on the occasion of Diwali. The company is waiting for approval from capital markets regulator SEBI for this. However, the company has not yet given any official information regarding the valuation of the IPO and the timing of its launch.
There will be an offer for sale of Rs 8,300 crore
Paytm submitted documents to SEBI in July 2021 for an IPO of Rs 16,600 crore. This will include the issuance of new shares as well as an offer for sale (OFS) of Rs 8,300 crore from the shareholders of the company. Sources said that the company has not yet decided on the pre-IPO round. It will depend on the needs of the investors, tax and lock-in period. Paytm founder Vijay Shekhar Sharma and other shareholders will sell some of their stake in the company through an offer for sale.
Vijay Shekhar will no longer be the promoter of Paytm
Alibaba and its subsidiary Ant Group hold 38 per cent stake in online payments, Elevation Capital has 17.65 per cent and Japan’s SoftBank holds 18.73 per cent. Vijay Shekhar Sharma will cease to be a promoter after Paytm is listed on the stock exchange. Let us tell you that the company last month gave its employees time to convert Employee Share Option Scheme ie ESOPs into shares. Paytm’s parent company One97 Communications, in an e-mail to its employees, had asked if they were willing to convert their ESOPs into shares.