Paytm’s parent One97 Communications will be launching its IPO on November 8. The price band for the IPO has been fixed at Rs 2,080-2,150 per share which means the company may raise INR 18,300 crore from the primary market, making it the biggest IPO yet.
State-owned public sector unit (PSU) Coal India raised Rs 15,200 crore in 2010, which stakes claim to that title till now.
Out of the total, the fresh issue is worth Rs 8,300 crore and an offer for sale is Rs 10,000 crore. Expert opinions concur that only very aggressive investors should apply to Paytm IPO for the long term, given its ‘deep penetration’ in the India market.
Paytm is a digital wallet-based platform offering services like lending, banking, money transfer, insurance, wealth advisory, e-commerce, travel and event bookings, gaming, and obviously recharge and bill payments. It also offers software and cloud services to merchants.
According to moneycontrol.com, digital payments in India has been evolving rapidly. Unique online transacting users, transacting for services such as online banking, mobile top-ups, in-store payments etc. are expected to grow from 250-300 million in FY21 to 700-750 million by FY26.
Paytm with its 337 million registered customers; 21.8 million merchants and a 40% market share in mobile transactions has turned itself into the poster child of fintech in India.
Even though experts believe Paytm IPO is the best bet to ride the Fintech IPO wave considering its market leadership, scale and wide array of products, they have expressed concerns over high valuations ascribed, owing to the fact that investors are betting on the future performance of the companies, though they may see some short-term listing gains.
So, proceed with caution seems to be the consensus.
Qrius advises readers to check with certified experts before taking any investment decisions. Views expressed in this article are not meant to be advisory in nature and are for knowledge purposes only.