India’s biggest initial public offering (IPO) is expected to get even bigger with One97 Communications Ltd., which runs the Paytm payments service, planning to increase its public issue size to ₹18,300 crore, two people aware of the discussions said.
While filing its draft prospectus earlier in July this year, Paytm said it was targeting an issue size of ₹16,600 crore (roughly $2.2 billion), which included the sale of new shares worth ₹8,300 crore. Existing investors were expected to sell stocks worth another ₹8,300 crore.
Paytm is now expected to increase the secondary share sale from existing investors to ₹10,000 crore as a part of the increased IPO size. The primary portion of the fresh share issue will remain unchanged, the people cited above said on condition of anonymity. Roughly half of the offer for sale by existing shareholders will be by Paytm’s biggest investor Ant Financial, which currently owns 29.6% of the company, they added.
“Almost half of the secondary portion in the offer for sale is by Ant Financial and the remaining by Alibaba, Elevation Capital, Softbank and other existing shareholders. This could be to adhere to Sebi’s guidelines for professionally managed companies with no identifiable promoters, which Paytm is aiming to list as,” one of the people said. Paytm may also look to list on both Indian exchanges, the person added.
A Paytm spokesperson declined to comment on the development.
Mint reported on 23 October that the company could look to list on the Indian bourses by mid-November.
The news around Paytm’s increased IPO size comes at a time when the company has decided not to go ahead with its ₹2,000 crore pre-IPO fundraise owing to unfavourable valuation outcomes with investors, Bloomberg reported last week.
The company plans to use ₹4,300 crore of the fresh issue to grow its existing business lines and acquire new merchants and customers, according to its draft share sale documents. Investment banks, including Morgan Stanley, Goldman Sachs Group Inc., Citigroup Inc. and ICICI Securities Ltd, are managing the share sale.
This article was first published on livemint.com.