India’s Paytm Plans $3 Billion IPO At Minimum $25 Billion Valuation

Indian payments platform Paytm is planning an initial public offering (IPO) with plans to raise $3 billion at an estimated $29 billion, a listing that is expected to be the biggest in the country, Financial Times (FT) reported, citing sources. 

Paytm, co-founded by its CEO Vijay Shekhar Sharma about a decade ago, had a valuation of about $16 billion after its last funding round two years ago. The company now has about 150 million active users and is among India’s biggest technology companies. But it has yet to turn a profit, per FT.

“Paytm ruled India, it was in the driver’s seat,” about five years ago, Neil Shah, an analyst at technology research firm Counterpoint, told FT. “But it is still bleeding money.

“This is the right time to do an IPO because the competition is rising fast and that preference for Paytm is declining; the IPO could make the difference for them to compete,” he said, per FT. 

JP Morgan, Goldman Sachs, Morgan Stanley and ICICI Securities were hired as book-runners for the IPO. 

Earlier this month, Paytm sent an offer for sale (OFS) to its workforce indicating that they can sell all or part of their equity shares in the IPO, or keep them. Paytm’s board greenlighted the IPO plans, “in principle” and the preliminary prospectus is expected to be filed in July.

Per regulatory mandates in India, 10 percent of shares have to be floated within two years, with 25 percent floated within five years. Paytm must also include a mix of new and existing shares.

In a September interview last year, Paytm President Madhur Deora told PYMNTS‘ Karen Webster that Paytm started as a payments platform but has grown into an end-to-end consumer platform. The company not only is licensed as a bank but also an insurance broker, a wealth manager and an equity broker and trader.