Paytm to raise $1.6B in primary issue, ahead of IPO; secondary fundraise to follow

The fundraise comes months ahead of homegrown fintech giant Paytm's IPO, which, at $3 billion, could be the biggest in the country.
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Paytm's parent company, One97 Communications is looking to raise $1.6 billion (Rs 12,000 crore) in a primary fundraise, with a secondary raise to follow soon, sources close to the matter told YourStory.

This fundraise comes just months ahead of the homegrown fintech giant's IPO — the biggest in the country — where it is expected to raise $3 billion, sources had earlier told YourStory, at a valuation of around $25-$30 billion.

Paytm declined to comment on the primary and secondary fundraising.

The Noida-based startup has roped in JPMorgan, Goldman Sachs, Morgan Stanley and ICICI Securities to lead the IPO.

Paytm founder Vijay Shekhar Sharma

A proposal to declassify Vijay Shekhar Sharma from his status as the promoter of the company, in a bid to comply with rules set out by the Securities and Exchange Board of India has also been made, following his letter to Paytm's board of directors.

"In this regard, it has been highlighted in the Founder Letter that the Company has seen multi-fold growth in the past two decades, including in terms of size, number of shareholders, net worth and number of employees including senior management personnel, which may be attributed to the investments made by reputed institutional investors in the Company, that have diversified its operations and activities, directly as well as through its multiple subsidiaries," the shareholder's notice read.

Sharma currently holds around 9.05 million equity shares, or 14.61 percent in the company - the remaining is held by institutional investors, employees, ex-employees and other third parties, the shareholder's notice, seen by YourStory, read.

"The Board...is of the opinion that the Founder (i) does not have control over the affairs of the Company, directly or indirectly, whether as a shareholder, director or otherwise, and (ii) the Board of the Company is not accustomed to act in accordance with his advice, directions or instructions," the notice added.

The IPO is likely to take place in November, around Diwali, and comes at a time when India's biggest tech startups such as Zomato, Nykaa, Delhivery, Flipkart, and Freshworks have all set sights on a public listing, encouraged by rising valuations, a healthy investor appetite, and plans to scale more widely.

Edited by Saheli Sen Gupta