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Paytm bags $1.1 billion in India’s largest anchor round ahead of IPO opening

Paytm, the IPO-bound Indian fintech firm has raised Rs 8,235 crore (~$1.1 billion) in India’s largest anchor round, securing almost 45 percent of its Rs 18,300 crore IPO. The anchor round was oversubscribed ten times by 74 investors, with 21 of them bidding more than Rs 100 crore.

Paytm logo displayed on a White smartphone

Illustration: TechStory × Freepik (Raw Pixel)

The anchor round featured participation from both domestic and foreign institutional investors which include Aditya Birla Mutual Fund, Blackrock Inc., Canada Pension Plan Investment Board (CPPIB), and GIC Pte all placing the highest bids.

As part of Paytm’s anchor round, Blackrock invested Rs 1,045 crore, CPPIB invested Rs 938 crore, Aditya Birla Mutual Funds invested Rs 555 crore, and GIC Pte. invested Rs 533 crore through various funds.

Pension funds, superannuation funds, and sovereign wealth funds, including the Abu Dhabi Investment Authority (ADIA), Government of Singapore, City of New York, and Texas Teachers Retirement, all participated in the financial services company’s initial public offering alongside other investors such as Standard Life Aberdeen, Vanguard and Fidelity, and UBS.

The IPO, which will be India’s largest-ever, after Coal India which raised Rs 15,745 crore in 2010, will consist of an Rs 8,300 crore primary issue and a Rs 10,000 crore secondary share offering. The IPO will be open for subscription from November 8 to 10, with a price band ranging between Rs 2,080 to 2,150 per share.

According to the company’s Red Herring Prospectus (RHP), it had around 333 million users and over 21.1 million merchant as of March 31, 2021. The market share of payments transaction volume and wallet payments transaction was 40 percent and 65 to 70 percent, respectively. Its merchant base increased twofold from 11.2 million in March 2019 to 21.1 million in March 2021. Paytm Payments Bank has a 17.1 percent market share with total outstanding fixed deposits were Rs 1750 crore as of March 31.

Paytm’s revenue from operations increased by 62 percent to Rs 890.8 crore in Q1 FY22, as per the RHP filing. However, the company’s losses increased by 34 percent to almost Rs 382 crore. In the April-June quarter of this fiscal year, it posted Rs 689.4 crore from payments and financial services. Its net loss climbed to Rs 381.9 crore in the first quarter of FY22, up from Rs 284.4 crore in the same quarter of FY21.

The fintech firm claims to have more than doubled its gross merchandise value (GMV) from Rs 69,700 crore in the three months ending June 30, 2020, to Rs 1,46,900 crore in the three months ending June 30, 2021.

Paytm will be the fourth leading Indian startup to go public, joining Freshworks, Zomato, Nykaa, and Policybazaar. Zomato and Freshworks both had a successful IPO, while Nykaa and Policybazaar will go public on November 11 and November 15 respectively.

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