(News Bulletin 247) – A pioneer in online payment in India, Paytm aims to raise the equivalent of $ 2.4 billion on the occasion of its IPO, which promises to be the largest in the history of the country.

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Founded in 2009 and already claiming more than 300 million users, the Indian online payments specialist Paytm will kick off its IPO on the Bombay Stock Exchange on Monday. The group will issue 83 billion rupees ($ 1.1 billion) of new shares, while some current shareholders will market 100 billion rupees ($ 1.4 billion) of securities, bringing to nearly $ 2.4 billion the total amount of the transaction, according to the prospectus filed with Indian regulators.

The new shares will be issued in a price range of Rs 2080 to Rs 2,150 per security as part of the offering, which begins Monday and ends Wednesday. The deal is expected to make Paytm India’s most valued tech company at $ 20 billion, up sharply from the $ 16 billion in the last funding round in November 2019.

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In addition, Paytm is expected to break the record of $ 2 billion held by Coal India in 2010, achieving India’s largest IPO.

A group supported by Blackrock and Alibaba

Paytm has already raised 82.35 billion rupees ($ 1.1 billion) last week from 74 key investors, including the Blackrock Fund and the Canada Pension Plan Investment Board. Paytm is also backed by Chinese tycoon Jack Ma’s Ant and Alibaba groups, which together hold nearly 35% of the company’s shares. For his part, the Japanese Masayoshi Son holds 18.3% through his Softbank Vision fund. Warren Buffett’s Elevation Capital and Berkshire Hathaway are also among its shareholders.

Self-made billionaire Vijay Shekhar Sharma, founder and CEO of the company he founded at the age of 32, which has a net worth of $ 2.4 billion according to Forbes, owns nearly 14% of shares.

From its launch in 2010, Paytm quickly became synonymous with digital payments in a country traditionally dominated by cash transactions. The company has benefited from the government’s efforts to curb cash transactions – including the demonetization of almost all banknotes in 2016 – but also the coronavirus pandemic.

“I started using Paytm just before the confinement,” Naina Thakur, owner of a grocery store, told AFP. “I didn’t know the coronavirus was coming but Paytm was very helpful to me during the pandemic.” More than 30% of its customers now pay for their purchases in its grocery store via Paytm. “It’s much easier than a wire transfer because they only need my cell phone number to pay and I get the payment within seven hours,” she says.

337 million customers

Meal delivery giant Zomato, another tech startup, has had the biggest IPO this year in India so far, with a $ 1.3 billion issue of securities in July.

Like Naina Thakur, some 22 million traders, taxi and rickshaw drivers and other providers accept payments ranging from 10 rupees (13 euro cents) to several thousand rupees through Paytm.

At the end of June, Paytm had 337 million customers, according to regulatory documents filed with the stock market authorities. The firm intends to grow rapidly by offering its services to the nearly 500 million Indians still underbanked who still remain isolated from the take-off of the Indian economy.

Profitability still distant

In the last fiscal year 2020-2021, the company completed transactions totaling over $ 54 billion, making it India’s largest payment platform.

Digital payments in India have grown 16-fold in the past four years. Mumbai-based financial analysis firm Motilal Oswal estimates digital payments in the country will cross $ 3.1 trillion in value by 2026.

But Paytm posted a net loss of 17 billion rupees last year, on turnover of 31.86 billion rupees, and warns investors that it expects to continue to record losses in the future. predictable.

(With AFP)