Paytm IPO to open on November 8 with share price Rs 2,080-2,150

The much-awaited initial public offering (IPO) of Paytm will open for subscription from November 8 to November 10 and it has been priced in the range of Rs 2,080 and Rs 2,150.

The issue size of the IPO of One97 Communications, the parent company of Paytm has now risen to Rs 18,300 crore from the earlier Rs 16,600 crore. The fresh issue will comprise Rs 8,300 crore and the offer for sale will be Rs 10,000 crore.

There is much expectation from the IPO of Paytm, which is the biggest in India after Coal India raised Rs 15,745 crore in 2010.

In FY19, Paytm reported losses of Rs 4,230 crore, which were brought down to Rs 2,942 crore in FY20 with a revenue of Rs 3,280.8 crore. In FY21, losses further narrowed to Rs 1,701 crore on a revenue of Rs 2,802.4 crore.

In the last three years, the adjusted EBITDA margin has improved from 130.3 percent to 59.0 percent in FY21.

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Revenue from operations and commerce and cloud services decreased by 14.6 percent and 38 percent, respectively, in FY20, and went up by 10.6 percent for payment and financial services to Rs 210.92 crore in FY21 from Rs 1,906.8 crore in FY20. 

The contribution profit improved from a loss of Rs 1,998 crore in FY19 to a profit of Rs 362.5 crore in FY21 while the contribution margin increased from a loss of 61.8 percent in FY19 to a profit of 12.9 percent in FY21.

Paytm had 333 million consumers and 21.1 million merchants as of March 31, 2021.

Payments transaction volume market share and wallet payments transaction market share stands at 40 percent and 65 to 70 percent, respectively. 

Its merchant base grew double-digit from 11.2 million in March 2019 to 21.1 million in March 2021.  

Paytm Payments Bank holds a market share of 17.1 percent. As of March 31, the total outstanding fixed deposits were Rs 1750 crore.

Paytm will become the fourth leading Indian startup to hit the public markets after Zomato, Nykaa and Freshworks. Zomato and Freshworks had a blockbuster listing while Nykaa will list its shares on November 11.

The Indian startup ecosystem, which has witnessed one of the strongest capital inflow, is also now moving forward towards the public listing route.