Paytm plans to launch its awaited IPO around November 8, and here is all you can expect from it- 

Paytm’s IPO- The country’s stock markets have recently been at the receiving end of heavy money inflows, and record-breaking numbers that both SEBI and NIFTY have registered have allowed investors and experts to be biting their fingernails, both in anticipation and excitement. Experts have been talking about the IPO rush and how investments in the primary market have recently drawn more attention than the secondary markets. 

Even though the gap between savings, in the form of bank deposits and market investments, and companies’ capital investments have been increasing for a disappointingly and alarmingly long time now, the rush that the securities market has offered to the domestic, as well as foreign investors, has been undeniably huge. 

Well, keeping up with the supposed spirit, Paytm has since joined the line. 

If it took place relatively recently, One97 Communications Ltd. has received the heads up from SEBI to go ahead with the acclaimed “India’s largest public debut,” or at least that’s what the company claims it would be. One97 Communications Limited is the parent company of the fintech major- Paytm. The market regulator’s approval of its initial public offering has raised spirits and called in for anticipations from experts and investors around the country. 

Before we move ahead and discuss in detail what the Initial Public Offering would mean for the company and the expectations that they have for the utilization of this offering, let’s first discuss what this approval from the country’s market regulator, Securities Exchange Board of India, SEBI, mean for the company and its dimensions. Paytm IPO to open on 8 November

The approval of Paytm’s Initial Public Offering and the expected timeline of events- 

With the approval that Paytm’s initial public offering has received from the Securities Exchange Board of India, we can expect the company to go ahead and launch its public offering, the final step to the process they began back in July of this year. 

The draft prospectus, which the company had filed back in July, included that the company is proposing to sell new shares worth Rs 8,300 crore and existing shares that are worth exactly as much. However, the company recently revised its issue size from Rs 16,600 crores to Rs 18,300 crore. This means that the additional amount will go to the offer for sale component with now Rs 10,000- do we sense more demand? Well, it looks like it. 

Well, do we have the exact timeline of how things would look like as we move ahead with the launch? Not mainly, It seems like the company appears to be interested in keeping the anticipation up. But we do have something that could give a little idea, for experts anticipate that Paytm would be launching its public offering sometime at the beginning of November, around Diwali. Well, the festive spirit is up, I believe. 

The company is expecting a valuation of USD 20-22 billion, and at last fundraise, the company was valued at USD 16 billion. 

What would Paytm likely use the funds for? Can we expect any foreign investors to participate in the IPO? Paytm's IPO Likely To Open On November 8 At A Price Band Of Rs 2,080-2,150 Per Share

Paytm expects that the new issue instead of the initial public offering would fetch them an approximate INR 4300 crore, which, however, it has listed to be used in a particular manner. The plan includes expansion of existing business lines and acquisition of new merchants and customers. Again, the timeline and specifics of these actions have not been defined in particular. Still, the company has given an estimated idea, luring in bidders for the offering. 

Even though the company, in the last fundraise, was valued at USD 16 billion, it expects a valuation above and beyond of USD 20 billion, up to about USD 22 billion. 

Not only that, but we also know some particulars of the foreign investors that are likely to participate in Paytm’s initial public offering, for the company has been seen to be in talks with Singapore’s GIC and ADIA, making them the likely participants in the company’s IPO and for the achievement of their expected valuation. 

Why this increase in IPO rush in the consumer internet space? What can we expect going forth? 

Well, it looks like it is the time of Indian consumer internet companies, for the fintech space in recent times has experienced some incredible feats, and the industry has been expanding with the entry of new and innovative entrants, especially since a large number of companies in the consumer internet space have gone public. 

The success of the food-tech firm Zomato’s initial public offering, despite speculations by experts, and a similar achievement by online travel agency has also led to speeding up of the company’s public offering, along with the prospective list of the IPOs in the fintech and consumer internet industry that would be witnessed by the following year. 

Some other consumer internet industry giants recently went public in India and the US, including Info Edge,, Infibeam, and Indiamart. These e-commerce firms have also seen quite an edge with their recent event. 

Coming up next to join the public offering rush and raise funds are cosmetic firms like Nykaa, the logistics firm Delhivery, and the very renowned online insurance aggregator Policybazaar. 

The last in the lot mentioned above would have a significant role in the country’s space, especially since India has been turning its face towards insurance policies from a very disappointing base point recently. The success of PolicyBazaar‘s initial public offering would add to more entrants in the industry, crucial for the country’s development and household stability.  Paytm IPO will open on 8th November : Here's How to apply , price band, lot size and more - IT Sambad

Morgan Stanley, Goldman Sachs, Axis Capital, ICICI Securities, JP Morgan, Citi, and HDFC Bank are the investments bankers working on the IPO according to the DRHP filed with Sebi.

Before Paytm, the biggest IPO in India Inc was launched by Coal India, which raised Rs 15,745 crores in 2010.

What can investors expect from emerging startups? 

Well, note first that classifying businesses in the umbrella term of startups requires thorough attention because while investing, experts believe that each startup should be seen and analyzed as a separate business. 

“Tech companies or startups have to be seen from the larger perspective of how wide their business opportunity is and what they can do in future,” said the research head of a leading brokerage firm.

Investment experts also say that in the case of fintech companies, investors should carefully evaluate as banks have also enhanced their digital presence and have done the technology upgrades. “For companies that have not been able to clearly define their business model and keep changing their focus, investors need to practice caution,” said a senior official with a financial services firm.

 Article Proofread and Edited by Shreedatri Banerjee

Simerleen Kaur

Talk to me about economics, trade, and all things India.

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