Paytm, with over 337 million registered users and more than 21.8 million registered merchants, is India’s top digital ecosystem. The company is reported to come up with what is expected to be India’s largest Initial Public Offering till date on November 8th 2021. The company was last valued at $16 billion in 2019 after raising $1 billion from investors.

The Plan

Paytm now plans to raise $2.4 billion after raising its IPO size by Rs 1700 crore to Rs18,300 crore as the current shareholders Alibaba, Ant Financial and Softbank want to sell more of their stakes.

Paytm plans to raise a part of this amount through fresh issues and the remaining part through an offer for sale from the existing shareholders of the company. Out of this 75% will be reserved for qualified Institutional Buyers, 15% for non-institutional investors and the last 10%for retail investors. Almost half of the offer for sale is by Ant financial and the remaining by other investors like Alibaba, Elevation Capital and Softbank.

According to the red herring prospectus of Paytm, Vijay Shekhar Sharma, the founder of Paytm will sell shares worth Rs 402 crore and the biggest gainers will be Alibaba along with its subsidiaries ANT Group and Alibaba.com.

The Offer’s use

Paytm plans to use the then acquired funds to strengthen the company by acquiring new consumers and merchants and retaining the old ones. It also plans to invest in new initiatives like acquisitions and partnerships. A part of the funds may also be diverted to the general insurance division of the company by the name Paytm Insurtech (PIT)

The parent company of Paytm One97 Communications works has multiple verticals like digital payments, commerce, lending and insurance. They also own an e-commerce business Paytm Mall as well as a payments bank Paytm Payments Bank. But both of these are not a part of the current public issue.

At a price range of ₹2,080 – ₹2,150 per equity share, Paytm’s IPO will open from November 8 and continue till November 10, 2021