Paytm said in a note to shareholders on Monday that its board had given
in-principle nod for its public listing. ET has reviewed the note. This is the first official word from the company on its proposed IPO.
The OFS option can be used by shareholders, including institutional investors such as China’s Ant Group, Japan’s SoftBank Group Corp, T Rowe Price and Elevation Capital (formerly SAIF Partners), to dilute their stakes.
The Noida-based fintech company, in the 79-page letter, invited applications from those looking to sell their stakes in the IPO, detailing the due process. Institutional investors as well as individuals with stakes and ex-employees with stock options were sent the letter.
Paytm will hold its annual general meeting on June 30, it had said over the weekend.
“Whilst the board of directors have provided in-principle approval for the IPO, the size of the offer for sale component is subject to final approval of the board of directors of the company,” Paytm said in the letter.
The firm, however, said it would disclose complete details of the Paytm IPO regarding the share price, issue size and valuation, when it files its Draft Red Herring Prospectus with the market regulator or on a later date closer to the offering.
The OFS is eligible only for shareholders that have held Paytm stake for over a year as on June 27, 2021. The shareholders willing to subscribe to the OFS have been given a deadline of June 22 to submit relevant documents such as consent letters, power of attorney and corporate authorisations.
“We wish to inform you that the OFS component has to be finalised before filing the DRHP with SEBI (Securities and Exchange Board of India),” Paytm said in the letter. “However, the price band for the IPO will be determined at a later stage, either at the time of filing the RHP or prior to the IPO opening for subscription (in which case there will be an advertisement at least two working days prior to issue opening).”
If the OFS is oversubscribed, the equity shares will be offered on a proportional or pro-rata basis, “subject to approval from the board”.
One97 Communications’ consolidated revenue from operations fell 14% to Rs 2,802 crore for the financial year 2021, according to its annual report, which ET
sourced independently last week. Losses, however, narrowed to Rs 1,701 crore during the period, from a loss of Rs 2,942 crore in FY20.
In a separate letter to shareholders on Sunday, Paytm also said that it was aiming to break even by the end of the current financial year.
The company, backed by China’s Alibaba and Japan’s SoftBank,
aims to go public by November and is expected to file its DRHP with Sebi by next month. Founded by Vijay Shekhar Sharma, Paytm is currently the most valued Indian startup, at $16 billion.
ET reported last week that Paytm’s board had cleared its proposal for an IPO by November.
Bloomberg said in a report that Paytm was aiming at a valuation of $25-30 billion. However, it is unclear whether it would be able to fetch such a significant mark-up from its $16 billion valuation currently.
SoftBank Vision Fund chief executive Rajeev Misra
told ET last week that the fund has not had discussions with founder Sharma on Paytm IPO valuation, and that it will not exit the company in the near term.