Paytm's Rs 18,300-cr IPO opens today; should you subscribe?

The three-day Rs18,300-crore initial public offer (IPO) of One 97 Communications Ltd. (Paytm) will open tomorrow (Monday), November 8, 2021.

The IPO comprises fresh issuance of equity shares worth Rs 8,300 crore and Rs 10,000 crore from an offer for sale (OFS) by existing shareholders.

The three-day Rs18,300-crore initial public offer (IPO) of One 97 Communications Ltd. (Paytm) will open tomorrow (Monday), November 8, 2021. The initial public offer will conclude on November 10, 2021. The IPO comprises fresh issuance of equity shares worth Rs 8,300 crore and Rs 10,000 crore from an offer for sale (OFS) by existing shareholders. The company has fixed a price band of Rs 2,080-2,150 apiece, implying a valuation of around Rs 1.48 lakh crore.

The Rs 18,300-crore offer, if successful, will be the biggest in the country after Coal India's IPO in 2010, wherein the state-owned company had garnered Rs 15,200 crore. Earlier, on Wednesday, Paytm raised Rs 8,235 crore from anchor investors.Earlier on Wednesday, Paytm raised Rs 8,235 crore from anchor investors.

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Incorporated in 2000, One 97 Communications Ltd is India's leading digital ecosystem for consumers as well as merchants. In 2009, the company launched the first digital mobile payment platform, "Paytm App" to offer cashless payment services to customers and now, it became the India's largest payment platform and the most valuable payments brand.

It offers payment services, commerce and cloud services and financial services to 337 million registered consumers and over 21.8 million registered merchants, as of June 30, 2021. Its software and cloud services allow large, medium and small merchants to improve their business operations and access important financial tools such as banking, wealth and credit facilities.

Should you subscribe?

Jyoti Roy, DVP, Equity Strategist, Angel One Ltd, is of the view that the digital payment platform will be benefitted from mobile payment growth and one should subscribe it. "At the upper end of the price band, Paytm is valued at 49.7x its FY21 revenues. While valuations may appear to be expensive, Paytm has become synonymous with digital payments through mobile and is the market leader in the mobile payment space. Patym is well positioned to benefit from the exponential 5x growth in mobile payments between FY2021 – FY2026, and hence believe that the valuations are justified. We recommend investors to SUBSCRIBE to the issue," she said.

Paytm IPO Timeline:

Application start date: November 8, 2021

Application end date: November 10, 2021

Allotment start date: November 15, 2021

Refund initiation date: November 16, 2021

Allotment date: November 17, 2021

Listing date: November 18, 2021

*Dates as per Upstox

Other IPOs

Meanwhile, the IPO comes after five companies—Nykaa, Fino Payments Bank, Policybaaar, SJS Enterprises and Sigachi Industries — successfully concluded their public offerings (IPOs) this week.

Besides, two more IPOs—Sapphire Foods India, which operates KFC and Pizza Hut outlets, and Latent View Analytics — will also open on November 9 and 10 respectively.

So far in 2021, as many as 46 companies have floated their IPOs to raise Rs 80,102 crore and market experts believe that the year should close with the Rs 1-lakh crore primary market fundraising, claimed a PTI report.

Apart from these, PowerGrid InvIT, the infrastructure investment trust (InvIT) sponsored by the Power Grid Corporation of India, mopped up Rs 7,735 crore through its IPO, and Brookfield India Real Estate Trust raised Rs 3,800 crore via its initial share-sale.

"The fundraising so far this year is way higher than Rs 26,611 crore collected by 15 companies through initial share-sales in the entire 2020," said PTI

Such impressive fundraising through IPOs was last seen in 2017 when firms mobilised Rs 67,147 crore through 36 initial share-sales.

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