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Paytm is looking to raise about Rs 21,800 crore ($3 billion) in an initial public offering (IPO) later this year, according to a report by Bloomberg.
The report says its board may meet on May 28 to formally approve the IPO. Paytm declined to comment about the development.
Banks shortlisted to run the Paytm offering include Morgan Stanley, Citigroup Inc. and JPMorgan Chase & Co., with Morgan Stanley the leading contender, the report added. The process is expected to get rolling in late June or early July.
The report also noted that Paytm is targeting a valuation of around $25 billion to $30 billion from the IPO.
Expert take
Commenting on the news report, Abhay Doshi of UnlistedArena said: “We need to wait for board approval first. Broad approval will set the ball rolling for Paytm’s IPO. In the unlisted market price of shares currently around Rs 13,500 up to 14,500 rupee per share, which values the company at approximately $12-13 billion. But as per the report as Paytm is looking forward to 25 to $30 billion valuations. So, it will be interesting to see that valuations because, if we see the data before two years Paytm shares were trading around Rs 20,000 per share, but the problem is that the space is very disruptive.”
According to a report released by Bernstein, Paytm’s revenue base to double by FY23 to $1 billion, with non -payments revenue contributing around 33%, led by credit tech. With increased financial discipline and targeted strategic investments, Paytm is on track to break even in 12 -18 months.
Due to the huge difference in expected IPO valuations and valuations prevalent in the unlisted market, expect some moves in the unlisted market on the higher side to catch up valuation gap to some extent, added Doshi.