Indicating plans for a mega initial public offering (IPO), Vijay Shekhar Sharma-led fintech major Paytm's parent company One97 Communications has filed its draft red herring prospectus (DRHP) with the market regulator SEBI to raise as much as 16,600 crores, Moneycontrol.
Founded by Vijay Shekhar Sharma, Paytm is currently the most valued Indian startup, at $16 billion.
The company has marquee investors including Ant Financial—the world’s largest fintech unit of Chinese Behemoth Alibaba—and Japanese VC SoftBank.
One97 Communications' Paytm IPO will be the biggest public issue to date in India, a record that has until now been held by state-owned Coal India, which raised Rs 15,000 crore over a decade ago.
At Rs 8,300 crore, half of the total sum raised would be through a primary share sale, while the other half will be an offer for sale (OFS) by the existing investors in the company.
Of the Rs 8,300 crore raised through the primary share sale, the company will be using Rs 4,300 crore for growth, including customer and merchant acquisition. Another Rs 2,000 crore will be used for investing in new business initiatives, investments and strategic partnerships.
Paytm's move to file the DRHP comes just days after its shareholders approved its plans to raise Rs 12,000 crore through a fresh issue of shares at an extraordinary general meeting. Shareholders also gave their nod for Sharma to be declassified as a promoter, as he does not own the requisite 20 per cent stake in the firm. Sharma will continue to be the chairman, managing director and chief executive officer of the company.
Of late, the company has been experiencing headwinds. Its revenue from operations fell 14% to Rs 2,802 crore for the financial year 2021, according to its annual report. Losses, however, narrowed to Rs 1,701 crore during the period, from a loss of Rs 2,942 crore in the 2020 financial year.
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