Paytm raises $1 billion from anchor investors ahead of IPO launch next week

Paytm IPO will be the biggest in the country after Coal India's IPO in 2010 wherein the state-owned had garnered $2.03 billion. Paytm has mobile payments transaction volume market share of approximately 40 per cent.

Digital payments company Paytm is all set to launch its initial public offer (IPO) next week. The issue will open for three days - from November 8-10.

Paytm IPO will launch for three days - from November 8-10.(Reuters File Photo)

Ahead of the IPO launch, Paytm on Wednesday raised $1.1 billion ( ₹8,235 crore) from anchor investors. The anchor investor round saw participation from Blackrock, CPPIB, Birla MF, GIC and other blue-chip funds leading to 10 times oversubscription of the shares, as per a stock exchange filing.

Blackrock invested ₹1,045 crore, Canada Pension Plan Investment Board ₹938 crore and GIC ₹533 crore.

With this, Paytm has already secured 45 per cent of its $2.4 billion ( ₹18,300 crore) IPO.

The offer will be the biggest in the country after Coal India's IPO in 2010 wherein the state-owned had garnered $2.03 billion ( ₹15,200 crore).

The price band for the IPO will be between ₹2,080-2,150 per share, implying an enterprise value of $19.3 to $19.9 billion.

The IPO comprises issuance of fresh equity shares worth ₹8,300 crore and offer for sale (OFS) by existing shareholders to the tune of ₹10,000 crore.

Through the OFS, One97 Communications Managing Director and CEO Vijay Shekhar Sharma will offload shares worth up to $53.94 million ( ₹402.65 crore) while Antfin (Netherlands) Holdings will sell shares to the tune of $643 million ( ₹4,704.43 crore).

According to research firm Redseer, Paytm has mobile payments transaction volume market share of approximately 40 per cent, and wallet payments transaction market share of 65-70 per cent in India as of FY 2021.

With several factors, including government initiatives and reforms, improving technology, increasing reach and awareness, digital payments are expected to more than double from $20 trillion in FY 2021 to $40-50 trillion by FY 2026.