Ant Group-backed Indian fintech major Paytm to raise $2.2b from IPO

One97 Communications, the parent company of India’s digital payments firm Paytm, has filed a draft red herring prospectus (DRHP) with market regulators to raise 166 billion rupees (US$2.2 billion) from its initial public offering (IPO).

The IPO will consist of new shares worth 83 billion rupees (US$1.1 billion), the company said in the documents submitted to the Security and Exchange Board of India (SEBI).

Vijay Shekhar Sharma, founder and CEO of Paytm / Photo credit: Tech in Asia

The company plans to use the proceeds to grow and strengthen its ecosystem through customer acquisition and retention efforts and investments in acquisitions and strategic partnerships, among others.

According to an Economic Times report, the company may seek a valuation between US$24 billion and US$30 billion. Paytm’s IPO, expected to go live in November this year, is said to be one of the largest public offerings in India. Just recently, homegrown startup Zomato launched its IPO worth US$1.3 billion.

Founded in 2010, Paytm started as a pre-paid mobile recharge platform. In subsequent years, it added features such as e-wallet, ecommerce, utility payments, and more. SoftBank, Ant Group, and Berkshire Hathaway are among some of the key investors in Paytm.

The Indian firm saw a meteoric rise in adoption in 2016 when the government demonetized the 500 rupee and 1,000 rupee currency notes. The ban encouraged users to adopt digital payment platforms such as Paytm for peer-to-peer payment. Since then, India’s booming digital payments space has attracted international players such as Google Pay, Amazon Pay, and WhatsApp Pay.

As of March 31, 2021, Paytm has onboarded 333 million consumers and 21.1 million merchants, the company said in a statement.

*Currency converted from Indian rupees to US dollar: US$1 = 74.6 rupees