Indian FinTech platform Paytm might skip its pre-IPO plans and accelerate the launch of its $2.2 billion initial public offering to coincide with the end of Diwali Nov. 4, multiple sources told India.com for its report Friday (Oct. 22).
That decision is based on Paytm’s desire to streamline the IPO process and go directly to the market, the report says. If Paytm skips its pre-IPO fundraising, it won’t be related to valuation discrepancies.
Paytm, which has a multi-stack payment architecture, will seek a valuation in the range of $20 billion to $22 billion, one source said. Its most recent valuation put the company at $16 billion. The company’s draft red herring prospectus (DRHP) says it “may consider” a Pre-IPO placement.
“Pre-IPO is always just an option for companies heading for a market debut, and it’s not exercised by most companies. It makes sense to put the Pre-IPO option in the DRHP, as otherwise the company cannot raise any primary capital,” one source told India.com. “Companies end up not taking up the Pre-IPO option as it only delays the process.”
Paytm — which provides payment, cloud, eCommerce and financial services to more than 333 million customers and 21 million businesses — could soon get the blessing of the Securities and Exchange Board of India (SEBI) for its IPO.
Related: Paytm, HDFC Bank Partner To Provide Consumer, Merchant Solutions
In August, Paytm and private Indian bank HDFC Bank announced a strategic partnership on financial solutions for Indian customers and merchants that will “accelerate digital transformation in semi-urban and rural India.”
HDFC has more than 50 million debit and credit card customers and 2 million merchant acceptance points.
The deal with India’s largest private bank will include the launch of new products in the digital payments, lending and point-of-sale (POS) solutions spheres. HDFC Bank will be the payment partner, and Paytm will be the distribution and software partner for a new payment gateway and POS solutions.
Paytm and HDFC Bank also plan to launch a co-branded retail POS product.
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