Paytm is aiming for a $3 billion IPO, if successful, will beat Coal India Ltd.’s IPO in 2010, which is country’s largest IPO to date.
India’s one of the top e-commerce payment company Paytm, is asking employees if they want to sell stock in the company’s upcoming initial public offering (IPO), taking a step closer to what may be the country’s largest stock market debut ever.
According to documents reviewed by Bloomberg News, Paytm, formally known as One97 Communications Ltd., delivered the “offer for sale” to its employees on 7 June as it prepared to file for an IPO.
The source familiar with the situation said that the firm’s board has accepted the offering plans in principle and currently finalizing the draft red herring prospectus, which may be filed by the first week of July.
Amit Khera, who is One97’s secretary, said that the firm is seeking to make an initial public offering of its equity shares, subject to market conditions, regulatory, corporate and other approvals, as well as other relevant factors, under the applicable law.
He added that One97 had received in-principle approval from the board of directors of the company in this regard.
Early reports said that the business, whose investors include Berkshire Hathaway Inc., SoftBank Group Corp. and Ant Group Co., was looking to raise $3 billion (approximately Rs 218 arab) at a valuation of $25 billion to $30 billion.
However, Paytm’s maiden share sale, if successful, will beat Coal India Ltd.’s IPO in 2010, which raised more than Rs 150 arab in the country’s largest IPO to date.
As per the unicorn tracker CB Insights, One97 was recently valued at $16 billion.
To comply with Indian legal requirements, Paytm’s public market debut will contain a combination of new and existing shares.
According to the regulations, 10 per cent of shares must be floated within two years and 25 per cent within five years.
Employees will be able to sell their shares as part of the IPO via the offer for sale, or OFS.
According to the filings, Paytm’s board of directors has given preliminary consent to the launch, but formal clearance will not be given until the prospectus is determined.
The documents also added that if current shareholders seek to sell more shares in aggregate than was allowed at the IPO, their capacity to sell stock will be assessed on a pro-rata basis.
On the offering, Morgan Stanley, an investment banking company, is collaborating with Paytm.
However, the report added that employees can take part in the IPO by agreeing to sell all or part of their equity shares, a decision that must be made before the first offering documents are filed with the country’s regulator.