Mumbai: The biggest initial public offering in India opened Monday with a Paytm digital payment platform that wants to collect almost $ 2.5 billion, in what has become a recording year for the stock list.
Paytm is supported by the Tycoon Jack MA Ants Group, Japan Softbank and Warren Buffett’s Berkshire Hathaway, who together have a third of the company.
The company was founded almost a decade ago by Vijay Shekhar Sharma, the son of a school teacher who said he studied English by listening to rock music.
He was in the ranker of the youngest dollar in India four years ago at the age of 38 and now has a net worth of $ 2.4 billion, according to Forbes.
He has almost 14 percent of the shares.
Paytm issued fresh shares worth 83 billion rupees ($ 1.1 billion), with existing shareholders who sold shares worth $ 1.34 billion, according to the prospectus.
The IPO is expected to make the most valuable Indian Paytm technology company with an assessment of $ 20 billion, up 25 percent from two years ago.
The platform was launched in 2010 and quickly became synonymous with digital payments in countries traditionally dominated by cash transactions.
It has benefited from the government’s efforts to curb the use of cash – including demonetization of almost all banknotes circulating five years ago – and the latest from Covid.
“I don’t know Corona will happen but Paytm is very useful for me during a pandemic,” said the owner of the Mumbai Naina Thakur grocery store told AFP.
Thakur said about one third of his customers paid for milk, bread and other daily food ingredients through Paytm.
“It’s much easier than bank transfer because they only need my cellphone number to pay and I get a settlement within seven hours,” he said.
Thakur is one of almost 22 million Indian shop owners, taxi drivers and other rickshaws and vendors who receive payment as low as 10 rupees ($ 0.13) using the blue-white QR code sticker Paytm.
This platform has 337 million customers at the end of June, according to the submission of company regulations.
In 2020-21 he made a transaction worth more than $ 54 billion.
The number of mobile payments in India has skyrocketed, contributing 26 billion transactions in the financial year of 2020-21.
Mumbai-based financial analysis company estimates that cellular digital payments will cross $ 3.1 trillion in 2026.
Foreign Giants also tried to take a piece of pie including Google and Amazon.
The other main players are Phoneeepe, owned by Flipkart where Retail Giant as Walmart has a majority shares.
But Paytm has made a continuous loss and not sure when to get a profit.
It reported a net loss of 17 billion rupees last year at a revenue of almost 32 billion rupees.
“We hope to continue to issue clean losses for the future and we may not achieve profitability in the future,” Prospectus warned.
Paytm has reported negative cash flow over the past three years, mainly due to operational losses.
With the target of $ 2.46 billion, Paytm will go beyond the publication of $ 2 billion in India in 2010 to become the largest IPO in India.
Towards the offer, Paytm collected 82.35 billion rupees from 74 investor anchors including BlackRock and the Canadian retirement program investment board last week.
Paytm will issue shares in the ribbon at 2,080-2,150 rupees in the offer, which is scheduled to be closed on Wednesday.
Indian companies have collected $ 9.7 billion through the IPO in 2021 so far, the numbers of the market monitor database show.
Zomato food delivery giant is the largest IPO in the country until now with a problem of $ 1.3 billion in July.
This year, India has also seen the number of unicorn records made – start-up with an assessment of $ 1 billion or more – the benefits of feared investors with hard action on technology giants in China.