Paytm sends ‘offer for sale’ to staff as it moves ahead with $3 bn IPO
India’s Paytm is asking employees to decide whether they want to sell shares in the digital payments pioneer’s planned initial public offering, taking another step toward what could be the country’s largest stock market debut ever.
The startup, formally called One97 Communications Ltd., sent the “offer for sale” to its staff Monday as it prepares to file for the IPO, according to documents reviewed by Bloomberg News. Paytm’s board has approved the offering plans in principle and is finalizing the draft red herring prospectus, which could be filed as soon as the first week of July, according to a person familiar with the matter.
One97 Communications “is proposing to undertake an initial public offering of its equity shares (“Equity Shares”), subject to market conditions, regulatory, corporate and other approvals, and other relevant considerations, in accordance with applicable law, and has received an in-principle approval from the board of directors of the Company in this regard,” Amit Khera, One97’s secretary, said in the notice to employees and shareholders.
The company, whose investors include Berkshire Hathaway Inc., SoftBank Group Corp. and Ant Group Co., is seeking to raise about 218 billion rupees ($3 billion) at a valuation of around $25 billion to $30 billion, Bloomberg News reported in May. Coal India Ltd. raised more than 150 billion rupees in 2010 in the country’s largest IPO so far.
Read More: IPO-bound Paytm narrows losses to Rs 1,701 cr, reduces expenses in FY21
One97, last valued at $16 billion according to unicorn tracker CB Insights, is part of a new generation of promising startups emerging in India. During one historic week in April, six startups reached valuations of $1 billion or more — unicorn status in the tech industry.
Paytm’s public market debut will include a mix of new and existing shares to meet regulatory obligations in India. The country’s regulations require that 10% of shares are floated within two years and 25% within five years.
The offer for sale, or OFS, will allow employees to sell their shares as part of the IPO. The documents state that Paytm’s board has given its preliminary approval to the debut, but formal approval cannot take place until the prospectus is finalized.
If existing shareholders want to sell more in aggregate than allowed during the IPO, the ability to sell stock will be determined on a pro-rata basis, according to the documents.
Morgan Stanley is working with Paytm on the offering. Paytm declined to comment on the listing.
Employees can participate in the IPO by consenting to offer all or part of their equity shares, a decision that would need to be finalized before the filing of the first of the offering documents to the country’s regulator. Equity shares not sold during the offering would be locked-in for a one-year period, the notice said.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
