Indian payments group Paytm has called a meeting of shareholders next month to approve an initial public offering which is billed as the largest in the country with plans to raise up to $ 3 billion.
The group, which is backed by China’s Ant Group and Japan’s SoftBank, has appointed JPMorgan, Morgan Stanley, Goldman Sachs and India’s ICICI Securities to lead the show, according to people familiar with the company. The offer will target a valuation of Paytm of $ 29 billion.
With operations ranging from digital payments to banking services, Paytm was valued at $ 16 billion in its last funding round in 2019 and has long been a success for India’s burgeoning tech sector.
But it was dethroned as India’s most valuable startup this month by the edtech company. by Byju.
It also faces stiff competition in online payments from Western rivals such as Google Pay and PhonePe, a service provided by Walmart’s Indian e-commerce platform Flipkart.
Five years ago, “Paytm ruled India, he was in charge,” said Neil Shah, an analyst at technology research firm Counterpoint. “But it’s still bleeding money.
“This is a good time to do an IPO because the competition is increasing rapidly and this preference for Paytm is diminishing; the IPO could make the difference so that they can compete, ”he said.
As a generation of Indian tech start-ups mature, several more unicorns are considering signing up this year.
Meal delivery company Zomato has submitted its draft prospectus in April seeking to capitalize on a sharp increase in online deliveries to India during the coronavirus pandemic.
Insurance aggregator Policybazaar and beauty e-commerce site Nykaa have also said they are considering ads, as is Walmart’s Flipkart.
Under the leadership of its co-founder and CEO Vijay Shekhar Sharma, Paytm was one of the first to target digital payments and today has around 150 million monthly active users.
But Paytm has struggled to become profitable, even though it has cut losses for two consecutive years.
Last year, Paytm reported a loss of 17 billion rupees ($ 230 million) from 29 billion rupees the previous year.
“We see a lot of these start-ups considering an Indian listing, in part because of the high global liquidity,” said Gokul Rajan, capital markets lawyer at Cyril Amarchand Mangaldas.
He said many companies also view domestic listings, which are regulated by the Securities and Exchange Board of India, as the “most viable option” over overseas offerings or buying companies for use. special.
“Sebi regulations allow unprofitable companies to go public, and Indian unicorns are moving a bit closer to the US market, with valuations based on their potential rather than historical results,” he said.
Paytm’s Sharma has been no stranger to controversy over the years. He was mingled with a blackmail scandal in 2018 after accusing his public relations manager of attempting to extort $ 2.7 million.
The general manager has been a fierce critic of the “arbitrary powers and influenceFrom Silicon Valley companies in India and backed a ban by New Delhi on Chinese apps, even though its biggest investor is Chinese.
He once tweeted that it is “the time of the best Indian entrepreneurs to come forward and build the best by Indians, for Indians! “
Additional reporting by Hudson Lockett in Hong Kong