Digital payment firm Paytm launches India’s biggest IPO. All you need to know

One97 Communications-owned Paytm opened its much-anticipated initial public offer for subscription on Monday, in what is touted to be the largest-ever public issue in the history of Indian capital markets. The price band of the three-day share sale, which concludes on Wednesday, has been fixed at ₹2,080-2,150 per share. Throught its share sale, the Noida-headquartered company is aiming to raise a whopping Rs 18,300 crore, making it the largest-ever IPO in India.

The offer, if successful, will be the biggest in the country after Coal India’s IPO back in 2010 wherein the state-owned company had garnered Rs 15,200 crore. As per the latest updates, the IPO had been subscribed 9 percent as of now, the first day of bidding, receiving bids for 45.52 lakh equity shares against offer size of 4.83 crore shares.

The Paytm IPO consists of fresh shares worth Rs 8,300 crore and an offer for sale (OFS) by existing shareholders to the tune of Rs 10,000 crore. The lot size of Paytm IPO consists 6 shares amounting to Rs 12,900 at the higher price band of Rs 2,150. A retail investor can place bids for a maximum of 15 lots or 90 shares amounting to Rs 193,500.

Ahead of the IPO, the company raised Rs 8,235 crore from anchor investors such as BlackRock, the world’s largest asset manager, Canada Pension Plan Investment Board (CPPIB), Birla MF, GIC, along with other bluechip funds.The Paytm IPO has got 75 per cent reserved for qualified institutional buyers (QIBs) and 15 per cent reserved for non-institutional investors (NIIs).

Paytm garnered interest from 122 institutional investors who bought more than 38.3 million shares for ₹ 2,150 apiece, according to a regulatory document dated November 3.The remaining 10 per cent of the issue is available for retail investors.

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The public offer is expected to take the company’s valuation to $20 billion. Paytm is currently India’s second most-valuable internet company, last valued at $16 billion when it raised a billion dollars in November 2019 led by T Rowe Price, Discovery Capital and D1 Capital.

Paytm aims to utilise the returns from the IPO for various activities like “acquisition of consumers and merchants and providing them with greater access to technology and financial services”. The company will also invest in new business ventures, partnerships and acquisitions, and the remaining funds will be used for other corporate activities.