BalrajPaytm, an Indian digital payments platform aims to initiate its initial public offering (IPO) in late October. The fintech startup has already filed its draft red herring prospectus (DRHP) with markets regulator SEBI on July 16 and is pending approval. Paytm hopes to break even in 18 months after filing for a Rs 16,600 crore ($2.2 billion) IPO, which will undoubtedly be India’s largest historically.
Image Source: Paytm | Background: Starline
Reuters mentioned in their article “Hopefully Paytm will be able to go out before Diwali,” the insider stated, referencing the festival of lights celebrated by Hindus in November. The Noida-based startup which is backed by China’s Ant Group and Japan’s SoftBank, reduced its operating losses to Rs 1,701 crore in the fiscal year ended March 31, 2021, from Rs 2,942 crore the preceding year.
According to the company’s annual report, the company accomplished this by reducing outgoings expenses from Rs 6,138.23 crore in FY20 to Rs 4,782.95 crore in FY21. Despite the fact that Paytm managed to spend Rs 1,397.05 crore on marketing in the fiscal year that ended March 2020, the digital payments giant reduced its marketing budget by 62 percent to Rs 532.32 crore as digital engagement increased.
Furthermore, the average number of Paytm transactions per month has been escalating. This is significant since users making payments to Paytm via the various modes resulted in a major source of revenue for the company, with an average capture rate of 0.64 percent in the fourth quarter of FY21.
Paytm’s primary target domains are online and offline payments and lending, but the company also wishes to capitalize on emerging potential including gaming, travel, and ticketing, as well as financial services such as mutual funds and stocks trading. According to the sources, the startup is pitching its payments infrastructure to merchants, including point-of-sale machines among other equipment, and Paytm’s platform, which enables merchants to manage their operations, will also be an important business within the next three to five years.
The fintech startup’s public offering will raise Rs 16,600 crore, with a primary issue worth Rs 8,300 crore and an offer for sale of Rs 8,300 crore from existing stakeholders, including founder Vijay Shekhar Sharma.
One97 Communications owned Paytm, served 33.3 crore customers with payment services, commerce and cloud services, and financial services, including over 2.1 crore merchants enrolled as of March 31, 2021. Its two-sided (consumer and merchant) ecosystem allows commerce and financial services by harnessing technology to improved customers’ lifestyles and support merchants in growing their businesses.