While earlier reports have said Paytm
aims to raise around $3 billion through the IPO, this is the first time the company has disclosed — albeit partially — how much it intends to raise. The company did not mention share sales by existing shareholders in Friday’s note.
Sources said Sharma wrote to the board about the change in his status as a promoter to comply with Sebi rules. According to a source, this could be a step towards Paytm classifying itself as a ‘professionally managed’ company before a local listing. However, there is no confirmation on this yet.
“The founder’s letter further highlights that the founder currently holds 9,051,624 equity shares of the company amounting to 14.61% of the total paid-up equity share capital of company on a fully-diluted basis, and can exercise any control over the affairs or the decision-making process of the company only to the extent of his shareholding,” the company added in its note.
China’s Ant Group and Alibaba
own nearly 38% of One97 Communications, while SoftBank owns 18.73%. Elevation Capital (formerly known as SAIF Partners) has a 17.65% stake.
On June 7, the Noida-based fintech firm wrote in a letter to the shareholders that it was contemplating a mix of fresh issuance and offer for sale (OFS) for shareholders for the company’s proposed IPO, scheduled for later this year.
“…is hereby accorded to create, issue, offer and allot such number of Equity Shares, for cash such that the amount being raised pursuant to the fresh issue aggregates up to ₹12,000 crores (“Fresh Issue”) (with an option to the Company to retain an over-subscription to the extent of 1% of the net Offer (defined below) size,” Paytm told its shareholders in the note, adding that the matter would considered in its EGM on July 12.
A spokesperson for Paytm declined to comment on the matter.
In all, Paytm has listed five “special businesses” to be resolved at the EGM. Matters pertaining to restructuring of employee stock options and adopting of new articles of association (AOA) will also be discussed, according to the note.
Paytm aims to go public by November and is expected to file its draft red herring prospectus with markets regulator, the Securities and Exchange Board of India, by next month. Founded by Sharma, Paytm is currently the second highest-valued Indian startup at $16 billion, behind edtech startup Byju’s, which is now valued at $16.5 billion.
Losses, however, narrowed to Rs 1,701 crore during the period, from Rs 2,942 crore in financial year 2020. In a separate letter to shareholders on Sunday, Paytm also said that it was aiming to break even by the end of FY22.