PAYTM files for IPO in India

India's number 1 mobile payment service provider, Paytm, is reportedly preparing for an IPO. This IPO (Initial Public Offering) would represent one of the largest market listing actions ever in the country.

FACTS

• Paytm, a subsidiary of One97 Communications Group, is reportedly targeting an IPO for $2.2 billion, or Rs 166 billion.

• In its regulatory filing, Paytm says the IPO will take the form of:
  • issuing new shares for a total amount of $1.1 billion (Rs. 83 billion),
  • the sale of shares by its historical investors for the same amount.

• India's leading digital payments company, whose major shareholders currently include Ant Group, Berkshire Hathaway and Softbank, has just sought regulatory approval to complete the massive transaction.

• If approved, Paytm would reach a valuation of $25 billion.

KEY FIGURES

• One97 Communications was last valued at $16 billion.
• It has more than 333 million users and a network of more than 21 million merchants.
• One97's consolidated net losses narrowed to 16.96 billion rupees for the year ended March this year from 28.42 billion rupees a year earlier.
• The group's revenue fell 14.6% to 28.02 billion rupees in its latest fiscal year.

CHALLENGES

• Bypassing international competition: The Indian market represents opportunities as vast as the country's population. It is therefore of great interest to foreign players such as Google, which is multiplying its financial services initiatives in the country, Facebook, which is trying to impose itself through the diversification of its messaging service WhatsApp, and Amazon, which is trying to impose its Wallet.

• Imposing its super App model: With one of the largest IPOs in the history of its country, Paytm wants to confirm its dominance as a mobile payment operator, as well as an ecosystem of services and synergies that it has built around its "superapp". Indeed, Paytm offers both classic and innovative financial services such as payment instruments, wallet, bank account, BNPL, wealth management as well as more remote services such as e-commerce, ticket booking or value storage.

• Expand its offering: Paytm also plans to use the capital from its IPO to expand its payment services offering and launch innovative initiatives and explore acquisition opportunities.

MARKET PERSPECTIVE

• Paytm was launched in 2009. Today, it stands as a payment-based super-application.

• Pandemic has accelerated the Indian digital economy. Paytm's already clear dominance is finally allowing it to further elevate its ambitions and leverage international investments.