India’s biggest-ever IPO of PAYTM to raise Rs 18,300 kicks off

Paytm IPO grey market premium

One97 Communication, India’s leading digital ecosystem for consumers as well as merchants, incorporated in the year 2000, opens its application window for IPO to raise Rs18,300 crores.

PAYTM app, which has become a household name for digital payments, was launched in the year 2009. It is one of the largest digital payment platforms in the country and the most valuable startup. Currently, the firm is valued at $20 billion. As per the data, as of 31st, March 2021  the company has a 333 million+ client base and 21 million+ registered merchants to whom, the firm, offers payment services, financial services, and e-commerce and cloud services. The firm has something for everyone, whether you are an end-user or a merchant. In the past decades, we can hardly find anyone in the country, who hasn’t used the services of PAYTM.

On the 8th November 2021 almost after two-decade, it has opened its window for the biggest ever IPO in the history of the Indian market to raise a whopping amount of Rs18,300 crores. The  IPO consists of a fresh issue of Rs8,300 crores and Rs10,000 crores under offer for sale. The sale of the share will continue for three days and will close on 10th November. The price band for the IPO is set between Rs 2,080-2,150 per share. Grey market’s premium for the IPO is at Rs62 above the highest bid of the price band.

 Ahead of the share sale, PAYTM has already raised Rs8,235 crores from its anchor investors. Paytm will not receive any proceeds from the offer for sale, however, it will use the net proceeds from the issue for growing its business lines and acquiring new merchants and customers. The shares on the online digital payment platform to list both on BSE and NSE on 18th Nov 2021.

 On the financial front, Paytm saw a 110% rise in gross merchandise value to Rs 1,46,900 crore for the quarter ended June 2021 against the GMV of Rs 69,700 crore reported for the corresponding period a year ago. But the company has still not managed to see any green in the net lines. However, losses have narrowed. The firm reported a loss of Rs1701 crores in FY2021, down from the reported loss of Rs2942 crores inFy2020. Revenue from the operation also shrunk to Rs3186.8crorer from revenue of Rs3540.7 crores earned in the year 2020.

Despite making continuous losses, the firm managed to get a valuation worth billions, based on its technology and the huge customer base of 333 million+. Further, with the rise in digitization, the company will certainly be adding more numbers to its merchants and customers.  But to lure customers and merchants and huge expenses are incurred on discounts and offers which is taking a toll on the financial numbers of the company. However, a large customer base, innovative technology, user-friendly interface, leadership, and nature of the business are making the company worth its valuation. Thus investing in a futuristic company is always a good option. However, investors must do their research before taking the call of investment. Investment is subject to market risk, which is unavoidable.

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