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Paytm gets regulatory approval for India’s biggest ever IPO

Paytm gets regulatory approval for India's biggest ever IPO -source
Paytm app is seen on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration

NEW DELHI, Oct 22 (Reuters) – Indian fintech unicorn Paytm has got permission from the capital markets regulator for its $2.2 billion stock market listing that is expected to be India’s largest-ever IPO specialist familiar with the affair informed Reuters on Friday.

Paytm was preparing its initial public offering for around the close of October, Reuters earlier reported.

The company, whose supporters include Ant Group, SoftBank’s (9984.T) Vision Fund, and Berkshire Hathaway (BRKa.N), narrowed its turning loss to 16.55 billion rupees ($221.00 million) in the fiscal year that concluded in March 2021, from 24.68 billion a year earlier. A source informed Reuters in July that Paytm was expected to break even in 18 months.

Many first-generation homegrown startups in India are planning to go public on national bourses, following on the spurs of food delivery startup Zomato (ZOMT.NS), which executed a stellar stock market appearance in July and which also includes China’s Ant Group as a stockholder. read more

Ant Group, with an about 30% stake, is Paytm’s biggest shareholder.

Launched a decade ago as a program for smartphone recharging, Paytm grew speedily after ride-hailing firm Uber listed it as a swift payment option. Its use increased further in 2016 when a limitation on high-value currency banknotes promoted digital payments.

Paytm has since branched out into services including insurance and gold sales, movie and flight ticketing, and bank deposits and remittances.

The Noida-based firm, which is also backed by Berkshire Hathaway Inc. and Jack Ma’s Ant Group Co., hopes to tap strong investor demand that’s sent the shares of fellow unicorn Zomato Ltd. soaring after its July listing. Formally called One97 Communications Ltd., if Paytm achieves its ₹16,600 crore ($2.2 billion) IPO target, it would surpass the more than ₹15,000 crore raised by state-owned Coal India Ltd. in 2013.

Paytm said in its draft prospectus that it plans to sell an equal number of new and existing shares.

The firm has the biggest share in India’s merchant payments market, with over 20 million merchant partners in its network. Its users make 1.4 billion monthly transactions, according to numbers in a recent company blog post.

($1 = 74.8880 Indian rupees)

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