- Date : 03/11/2021
- Read: 3 mins
The price band for the listing has been fixed at Rs 2,080 to 2,150 per share, with a lot size of six shares
Paytm's parent company, One97 Communications, helmed by founder and CEO Vijay Shekhar Sharma, will be opening subscriptions for its IPO starting November 8, 2021. Paytm is India’s largest digital payments aggregator, with over 337 million consumers and over 21.8 million merchants registered through its mobile platform.
Over the last 11 years, Paytm has evolved to bring full-stack payments & financial solutions to consumers - from funds transfers, investments, insurance and now a payments bank. Not only is Paytm India’s most valued unicorn but it is also slated for the biggest IPO on record, with the company looking to raise about Rs 18,300 crore.
What are the Paytm IPO details?
The price band for the listing has been fixed at Rs 2,080 to 2,150 per share, with a lot size of six shares and further application in multiplies of 6 shares thereafter.
Of the total issue size, 75% will be reserved for Qualified Institutional Buyers (QIBs), 15% for non-institutional investors (NIIs) and the balance 10% for retail investors.
The IPO will be open for subscription between Monday, November 8 and Wednesday, November 10.
What will Paytm use the funds for?
As per the Draft Red Herring Prospectus (DRHP) filed by One97 Communications, the funds will be used to grow and strengthen the Paytm ecosystem through the acquisition and retention of consumers and merchants and deployed towards new business initiatives and strategic partnerships.
What should investors know about the Paytm IPO?
As a business, Paytm is yet to turn profitable. In its DRHP, the company said, ‘We expect to continue to incur net losses for the foreseeable future.’ A significant portion of the revenues is reinvested in marketing and promotional activities. The company will continue to make higher spends with an aim to reach a customer base of 500 million. Investors who are keen to invest should be willing to stay invested for a while to make a good return on investment.
Another factor that could affect business growth is the payment processing charges. An increase in the charges levied by banks and card networks can impact the Gross Merchandise Value (GMV) transacted on the platform. A higher transaction fee could drive merchants to other aggregators.
‘Our profitability depends on the cost-effectiveness of our business…when we become a listed company, we will incur additional significant legal, accounting, and other expenses that we did not incur as an unlisted company,’ Paytm specified in the DRHP.