mobile payment company Paytm launches largest IPO in India – .

mobile payment company Paytm launches largest IPO in India – .

MUMBAI: India’s largest initial public offering opened on Monday with digital payments platform Paytm looking to raise nearly $ 2.5 billion, in what has already been a record year for stock quotes.
Paytm is backed by Chinese tycoon Jack Ma’s Ant Group, Japanese SoftBank and Warren Buffett’s Berkshire Hathaway, who together own about a third of the company.
The firm was founded barely ten years ago by Vijay Shekhar Sharma, the son of a schoolteacher who says he learned English by listening to rock music.
He was ranked four years ago at the age of 38 as India’s youngest billionaire and now has a net worth of $ 2.4 billion, according to Forbes. It has a stake of almost 14%.
Paytm was issuing new shares worth 83 billion rupees ($ 1.1 billion), with existing shareholders selling shares worth $ 1.34 billion, according to the prospectus.
The IPO is expected to make Paytm the most valued tech company in India with a valuation of $ 20 billion, up 25% from two years ago.
The platform was launched in 2010 and quickly became synonymous with digital payments in a country traditionally dominated by cash transactions.
It has benefited from government efforts to curb the use of cash – including the demonetization of almost all banknotes in circulation five years ago – and more recently, Covid.
“I didn’t know the corona would happen but Paytm was very helpful to me during the pandemic,” Naina Thakur, owner of the Mumbai grocery store, told AFP.
Thakur said about a third of her customers pay her for milk, bread and other daily groceries through Paytm.
“It’s much easier than a wire transfer because they only need my cell phone number to pay and I get the payment within seven hours,” she said.
Thakur is one of some 22 million Indian traders, taxi and rickshaw drivers and other vendors who accept payments as low as 10 rupees ($ 0.13) using the ubiquitous blue and white QR code stickers of Paytm.
The platform had 337 million customers at the end of June, according to the company’s regulatory record. In 2020-2021, it completed transactions worth over $ 54 billion.
The number of mobile payments in India has exploded, accounting for 26 billion transactions in fiscal year 2020-21.
Mumbai-based financial analysis firm Motilal Oswal estimates that mobile digital payments will exceed $ 3.1 trillion by 2026.
Foreign giants have also sought to grab a piece of the pie, including Google and Amazon. Another major player is PhonePe, owned by Flipkart in which US retail giant Walmart has a controlling stake.
But Paytm has been making continual losses and doesn’t know when to make a profit. He reported a net loss of 17 billion rupees last year on income of nearly 32 billion rupees.
“We expect to continue to incur net losses for the foreseeable future and we may not achieve profitability in the future,” the prospectus warns.
Paytm has reported negative cash flow for the past three years, primarily due to operational losses.
With its target of $ 2.46 billion, Paytm would surpass Coal India’s $ 2 billion issue in 2010 to become India’s largest IPO.
Prior to the offer, Paytm raised Rs 82.35 billion from 74 key investors, including BlackRock and the Canada Pension Plan Investment Board last week.
Paytm will issue shares at a price range of Rs 2,080-2,150 as part of the offer, which is expected to close on Wednesday.
So far, Indian companies have raised a record $ 9.7 billion through IPOs in 2021, figures from market monitor Prime Database showed.
Food delivery giant Zomato was the country’s largest IPO of the year so far with its $ 1.3 billion stock issue in July.
This year, India has also seen a record number of unicorns created – start-ups valued at $ 1 billion or more – benefiting from investors frightened by the crackdown on tech giants in China.


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