Paytm’s parent company One97 Communications has received approval from market regulator SEBI to launch an Initial Public Offer (IPO). Fintech platform Paytm plans to raise around Rs 16,600 crore through IPO.
This IPO of Rs 16,600 crore of Paytm will be the biggest IPO in the country till date. Till now this record was held by Coal India Limited, which entered the market in 2010 with an IPO of Rs 15,000 crore.
Under the IPO scheme, Paytm will issue fresh equity shares worth Rs 8,300 crore. While the remaining Rs 8,300 will be raised through offer-for-sale (OFS). Paytm founder, MD and CEO Vijay Shekhar Sharma and Alibaba Group will sell some of their stake as part of the proposed offer-for-sale.
According to market experts, Paytm is currently trading at a level of Rs 3300-3400 in the unlisted market. An expert associated with unlisted stocks said, “Paytm is trading at a very delicate level. It is expected that the price band of Paytm’s IPO will be lower than the prices prevailing in the unlisted market. There is a possibility of a fall in the price. Besides, higher rate in the unlisted market has reduced the trading volume of the shares.”
Paytm shares are trading in the unlisted market for the last 3 years. According to a report, Paytm will use the proceeds of the IPO to expand its existing business line and add new merchants and customers to its network.