Paytm, officially known as One97 Communications, is likely to file its draft red herring prospectus (DRHP) or offering document with the Securities and Exchange Board of India today, according to reports. Paytm, which counts Chinese companies Alibaba and Ant Group, Japanese company SoftBank and Berkshire Hathaway, owned by Warren Buffett, among its backers, is said to be seeking to raise Rs 12,000 crore from the main market offer.
Paytm will offer new shares and have the option to keep an oversubscription of up to 1%, the Noida-based digital payments company previously said in its notice of an extraordinary general meeting (EGM) of shareholders. At the meeting held in Delhi on July 12, Paytm shareholders approved the plan to increase Rs 12,000 crore through the sale of shares.
Ant Group and Alibaba own nearly 38 percent of Paytm’s parent company, One97 Communications, while SoftBank owns 18.73 percent and Elevation Capital (formerly SAIF Partners) 17.65 percent.
Zomato had the leading player advantage when it comes to SEO for Indian mega startups. The unicorn restaurant and food delivery aggregator’s public show of Rs 9,375 crore opened on July 14 and will close on July 16. The commercial portion of Zomato’s IPO was fully underwritten on the same day it launched and the core investor segment was underwritten 35 times, a testament to the strong appetite for unicorn IPOs.
Other local companies such as Flipkart, Ola, Nykaa E-Retail and Policybazaar are also waiting to follow the IPOs movement during this calendar year.
Paytm was launched in Noida in 2009 as a mobile top-up platform. It has grown exponentially after being listed by ride-sharing company Uber as a payment option, and the impetus given by demonetization for digital payments in 2016 has further fueled the fledgling company’s fortunes.
Over time, Paytm has branched out into insurance, gold sales and ticketing.
An Initial Public Offering (IPO) is a process in which a private company transforms into a publicly traded entity by offering shares to the public. Companies raise funds through IPOs for many reasons such as expansion, debt clearing, and funding for company expenses.
A draft red herring prospectus (DRHP) or offering document marks the start of the IPO process. It contains details about the company, the promoters and the proposed IPO, on the basis of which the market regulator approves the listing.