Indian digital payments leader Paytm files for an IPO

Summary

  • Indian digital payments leader Paytm is waiting on regulatory approval to raise up to 166 billion rupees ($2.23 billion). The company and its IPO will be one of the biggest stock market listings in the country.
  • The offering from Paytm includes backers such as Berkshire Hathaway  Inc (BRK), Ant Group, and SoftBank. It is expected that this IPO will be the beginning of a big IPO wave that will follow from other local fintech firms that are looking to expand.

  • Founded in 2010, Paytm dominates India’s Unified Payments Interface, allowing users to easily make digital payments from their phones.

Indian digital payments leader Paytm is waiting on regulatory approval to raise up to 166 billion rupees ($2.23 billion). The company and its IPO will be one of the biggest stock market listings in the country.

About the IPO

According to Reuters, the offering of the company is valued at up to $25 billion and comes at a time when the country is fighting for a market share with Alphabet Inc’s (GOOGL), Google Pay and Facebook (FB) owned WhatsApp Pay.

The company, formally known as One97 Communications Ltd, will sell new shares worth 83 billion rupees while existing investors will sell another 83 billion rupees in stock in the offering, the homegrown fintech startup said in a regulatory filing on Friday.

“Companies within the digital space have good growth potential because of the increase in the number of internet users and wide access among the youth,” said Ajit Mishra, vice president of research at Religare Broking in Noida.

The offering from Paytm includes backers such as Berkshire Hathaway  Inc (BRK), Ant Group and SoftBank. It is expected that this IPO will be the beginning of a big IPO wave that will follow from other local fintech firms that are looking to expand.

About Paytm

Paytm is India’s leading financial services company that offers full-stack payments & financial solutions to consumers, offline merchants, and online platforms. The company is on a mission to bring half a billion Indians into the mainstream economy through payments, commerce, banking, investments, and financial services. 

Founded in 2010, Paytm dominates India’s Unified Payments Interface, allowing users to easily make digital payments from their phones. The UPI payments infrastructure, built by a coalition of large banks in India, has emerged as the most popular digital payments method in India, due to New Delhi’s invalidation of more than 85% of the paper cash circulation in late 2016. Paytm has since expanded into e-commerce, insurance and even ticket booking.

One97 Communications Ltd that owns the brand Paytm is founded by entrepreneur Vijay Shekhar Sharma.

Vijay has managed to make banking accessible to millions of people through the innovative use of technology but it didn’t stop there. It’s wholly-owned subsidiary ‘Paytm Money’ has achieved the distinction of becoming India’s biggest investment platform within its first year, and is now one of the largest contributors of new Systematic Investment Plans (SIPs) to the Mutual Funds industry; it has already received approvals to launch Stock Broking, Demat Services and National Pension System (NPS) services, and strives to continue to broaden the financial services and wealth management opportunities to the unbanked and underserved Indians.

Paytm First Games, which is another group company (a joint venture between One97 Communications Ltd and AG Tech Holdings), has quickly become India’s go-to gaming and stay-at-home entertainment option for millions of users across the country. The platform caters to all types of gamers with an exhaustive array of games for amateurs as well as esports for gaming pros.

What is more, Paytm Insurance is a wholly-owned subsidiary of One97 Communications Ltd (OCL) and has secured a brokerage license from IRDAI. It offers insurance products to millions of Indian consumers across four categories including two-wheeler, four-wheeler, health and life. The company aims to simplify insurance and create a seamless, easy to understand online journey for its customers.

On other news, Zomato, an Indian food delivery compay As the food delivery platform Zomato’s initial public offering (IPO) has opened for subscription today, Paytm’s founder Vijay Shekhar Sharma wished the food tech unicorn’s founder and CEO Deepinder Goyal as he rooted for India’s first share sale by an internet company.

The retail portion of Zomato’s public offering was subscribed nearly 100% within an hour of the opening on Day 1 whereas the overall issue got subscribed nearly 0.18 times at around 11:45 am.

”Make it large Deepi ! Best wishes for superb listing. Rooting for you man #ZomatoIPO,” Paytm’s Vijay Shekhar Sharma said as a quote tweet of the founder of the food delivery app’s post that said “Just ordered a triple breakfast @zomato. Stress eating.” Several reactions poured in after Goyal’s tweets.

Disclaimer – I/we have no position in any stock mentioned. I wrote this article myself, and it expresses my personal opinions. I am not receiving any compensation for it, other than FDGT Academy. I do not have or had in the past any business relationship with any company that is mentioned in the above article.

Natalia C. - Junior Analyst at FDGT Academy

Natalia C. - Junior Analyst at FDGT Academy

I am a stock analyst/investor with prior experience and knowledge to BSc Accounting and Finance. After completing my degree and exposure to the accounting firms I decided that the direction I should choose is towards the Investment world. I completed my masters in Investment Management where it gave me solid fundamentals to build my career on. I have examined a lot of different aspects of investment, from REITS, derivatives, currencies, bonds, equity and hedge funds. I never stopped learning about the market which is why I can analyze and write articles for FDGT community always personally opinionated. My passion are green energy and electric vehicles stocks as a whole. I also had my share of analyzing the work form home stocks that are coming to take over in the upcoming years.

Leave a Reply

Your email address will not be published. Required fields are marked *