Paytm seeks $20 billion valuation in India's biggest IPO

·2 min read

Paytm, one of India’s most valuable startups, is seeking to raise as much as $2.4 billion in what is shaping up to be the biggest initial public offering in the country at a valuation of $20 billion, according to two people familiar with the matter and internal documents seen by TechCrunch.

Paytm filed the paperwork for an IPO with the local regulator in July this year. The startup, which has raised more than $3 billion over the past decade and was last valued at $16 billion, said at the time that it was looking to raise about $2.2 billion. In an updated filing this week, Paytm said it is seeking to raise $2.4 billion.

The startup is moving to price its share in the range of 2,080 to 2,150 Indian rupees ($27.70 to $28.60), a person familiar with the matter said, adding that the subscription will be available from November 8 to 10, and the trading will begin on November 18 -- or thereabout.

A successful listing would make Paytm the biggest IPO in India, surpassing a record $2.07 billion initial public offering by government-owned coal mining and refining firm Coal India 11 years ago.

Paytm, which is backed by Alibaba, Berkshire Hathaway and SoftBank among others, launched in 2009 to help users easily make digital payments from their phones and top up credit. It has since expanded to a wide range of services such as payment gateway, e-commerce marketplace, movie and travel ticket booking, as well as insurance and digital gold.

The startup, led by Vijay Shekhar Sharma, describes itself as having “created a payments-led super app, through which we offer our consumers innovative and intuitive digital products and services.” The startup says it has amassed over 330 million users across its services, more than a third of whom transact annually.

In the new filing, Paytm disclosed that it clocked $118 million in revenue from its operations in the quarter that ended in June this year, up 62% from the prior quarter. In Q2, the startup’s losses surged to $50.9 million, Paytm said, citing additional marketing and promotional campaigns in the run up to the IPO.

Paytm’s imminent IPO comes at a time when the pandemic has fuelled India’s digital economy and local stock exchanges are showing growing appetite for consumer tech stocks. Indian food delivery giant Zomato made a stellar debut earlier this year. Nykaa, a fashion e-commerce startup, is scheduled to list on Thursday. Indian insurance aggregator PolicyBazaar is scheduled to list next week.

In its filing, Paytm said that it plans to deploy over $250 million of the total capital it is seeking to raise in the IPO to enter new initiatives and explore acquisition opportunities. The startup's offerings compete with a range of services including Google Pay, WhatsApp Pay, PhonePe, MakeMyTrip and BookMyShow.

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