Indian payment group Paytm convened a shareholders ’meeting next month to approve a first public offering that is billed as the largest in the country with plans to raise up to $ 3 billion.
The group, which is backed by Ant Group of China and SoftBank in Japan, has appointed JPMorgan, Morgan Stanley, Goldman Sachs and ICICI Securities in India to lead the matter, according to people with knowledge of the company. The offer will be aimed at a Paytm valuation of $ 29bn.
With operations ranging from digital payments to banking, Paytm was valued at $ 16 billion in its last round of financing in 2019 and has always been a success story for the boom in the Indian technology sector.
But it was dethroned as India’s most valuable start-up this month by the company edtech Byju.
It is also facing stiff competition in online payments from Western rivals such as Google Pay and PhonePe, a service provided by Indian trading platform Walmart Flipkart.
Five years ago “Paytm ruled India, it was on the driver’s seat,” said Neil Shah, an analyst at technology research company Counterpoint. “But he always bleeds money.
“This is the right time to make an IPO because the competition is growing rapidly and this preference for Paytm is declining; the IPO could make the difference for them to compete,” he said.
As a generation of Indian technology start-ups matures, several other unicorns are contemplating announcing it this year.
Food delivery company Zomato presented his prospective project of April seeking to exploit a strong growth in online deliveries in India during the coronavirus pandemic.
Insurance aggregator Policybazaar and beauty ecommerce site Nykaa have also said they are considering ads like Walmart’s Flipkart.
Under its co-founder and CEO Vijay Shekhar Sharma, Paytm was one of the first to target digital payments and now has about 150 million monthly active users.
But Paytm has struggled to turn a profit, even though it has restricted its losses for two consecutive years.
Last year, Paytm reported a loss of Rs17bn ($ 230m) compared to Rs29bn the previous year.
“We have seen many of these start-ups look at an Indian list, in part because of high global liquidity,” said Gokul Rajan, a lawyer in capital markets for Cyril Amarchand Mangaldas.
He said many companies have also considered national listings, which are regulated by the Securities and Exchange Board of India, as “the most feasible option” compared to overseas offerings or purpose-built companies. special.
“Sebi’s regulation allows nonprofit companies to conduct IPOs, and Indian unicorns are moving a little closer to the U.S. market with assessments based on their potential rather than historical results,” he said. .
Paytm’s Sharma has been no stranger to controversy over the years. It was kneaded into one blackmail scandal in 2018 after accusing his head of public relations of trying to steal $ 2.7 million.
The chief executive has been a fierce critic of the “arbitrary powers and influence“Silicon Valley companies in India are supporting a ban by New Delhi on Chinese applications, even though their largest investor is Chinese.
He once tweeted that it is ”time for the best Indian entrepreneurs to advance and build the best from the Indians, for the Indians! “
Additional reports from Hudson Lockett in Hong Kong