The largest IPO ever opened in India,
The IPO of Paytm, India’s largest digital company, opened today. Earlier, the record was held by state-owned Coal India, which had an IPO in 2010 and was valued at Rs 15,475 crore.
Paytm’s IPO is worth Rs 18,300 crore, under which new shares worth Rs 8,300 crore will be issued. To invest in it, the investor will have to invest at least 12,900 rupees according to the upper price of the fixed price band. About 30 per cent of Paytm’s Rs 18,300 crore IPO is owned by Chinese giant Ant Group, meaning the two Ant Group companies will sell about Rs 5,490 crore worth of shares through the issue.
In the gray market, its share price is at a premium of only 3 percent above the price of the band, i.e. Rs. 2210 per share. However, market experts suggest a long-term investment. According to the Kantar BrandZ India 2020 report, One97 Communications’ pay app company Paytm has a brand value of $ 630 million (Rs. 46753.15 crore), the highest of all paid brands. Not only money transactions and purchases are made through this app, but shops also use it to advertise their products etc.
The country’s largest digital payment company Paytm’s Rs 18,300 crore IPO has opened today and will remain open till November 10. Under the issue, new shares worth Rs 8,300 crore will be issued under the Offer for Sale (OFS) and shares worth Rs 10,000 crore will be sold.
The price band of the stock with a face value of Rs 1 has been fixed at Rs 2,080 to Rs 2,150 per equity share. The shares may be finalized on November 15 and the shares may be listed on the exchange on November 18.
Link Intime India has been appointed as the Registrar for this issue. By raising Rs 4,300 crore through EPO, the company will further strengthen its ecosystem. Two thousand crore will be invested in new trade or acquisition or strategic partnership. In addition, the money will be used for general corporate purposes.
Through IPO, shares worth Rs. 10,000 crore will be sold under Offer for Sale (OFS). In this, the company of Ant Group will sell the most.
According to the company’s RHP (Red Herring Prospectus), Ant Group’s Antfinance (Netherlands) will sell shares for Rs 4,704.43 crore and Alibaba.com Singapore e-commerce for Rs 784.82 crore. According to documents filed with SEBI, Antfin (Netherlands) Holding BV holds 27.9 per cent and Alibaba.com Singapore e-commerce company holds 6.8 per cent. Of the total issue. The company’s founder and CEO Vijay Shekhar Verma has a 14.7 per cent equity holding and will sell shares worth Rs 402.65 crore.
According to Reliance Securities, Paytm’s IPO price is 43.7 times the sales of FY21 and 36.7 times the estimated sales of FY22, a 12 percent discount on the recently listed Unicorn Zomato. Despite the epidemic, Paytm’s gross trading value rose to a CAGR of 33 percent (compound annual growth rate) between FY19-21 and its digital payments business rose to a CAGR of 17 percent in price terms between FY21-26 estimates. Based on this, Vikas Jain, senior research analyst at Reliance Securities, advised investors to take up long-term membership in Paytm’s IPO.
Digital business is expected to triple in the next five years and mobile app payments are playing a role in the fast-paced era of a cashless society, according to Ashish Chaturmohata, director of research at Centum Health. Paytm IPO is available at 49.7 mcap / FY21 revenue. Despite the high valuation, Paytm has a strong presence in the digital finance space. Due to which Centum Wealth has given it a subscribe rating.
The company has about 333 million customers, 114 million users and 21 million registered merchants. Talking about the financial condition of the company, Paytm has not been able to make profit in any financial year since its inception. Although there is no profit (after tax) in the last three fiscal years, the deficit has decreased. In FY 2019, the company had a deficit of Rs 4,230.9 crore, which came to Rs 2,942.4 crore in the next fiscal year 2020 and then to Rs 1,701 crore in the next fiscal year 2021.