Paytm to seek shareholder nod for $1.6 bn primary raise

In the latest move towards its public market listing, One97 Communications, the parent entity of digital payments app Paytm, has sought shareholder approval to sell new shares worth up to Rs 12,000 crore ($1.6 billion). 

In a notice issued to its shareholders for an extraordinary general meeting (EGM), scheduled for July 12 in Delhi, the company said it will also have an option to retain an over-subscription of up to 1% of the total offer. TechCircle has reviewed a copy of the notice. 

Additionally, the notice contained proposals including the declassification of Paytm founder and CEO Vijay Shekhar Sharma’s status as promoter of the company, and amendments to its multiple employee stock option schemes. Sharma, in the notice, informed that board about the company’s multi-fold growth in the past two decades, including in terms of size, number of shareholders, net worth and number of employees. 

Sharma said that he currently holds a total of 9,051,624 equity shares of the One97 Communications, amounting to 14.61% of the equity share capital. The company has an aggregate of over 1,000 shareholders including institutional investors, employees, former employees and other third parties, Sharma added. 

Paytm did not respond to TechCircle’s requests for comments. 

Read: Paytm checks shareholder interest over proposed IPO  

Shareholders at Alibaba backed Paytm include Warren Buffet led conglomerate Berkshire Hathaway, Japan’s SoftBank Group Corp, and alternative investment firm Tiger Global Management.  

Paytm is reportedly looking to float an IPO of $3 billion which will value the company at $24 billion. The company is currently valued at $16 billion, as per media reports. Bloomberg reported on Wednesday that the company had hired four banks, including JP Morgan Chase & Co and Goldman Sachs Group, for the proposed float.

In its annual report, One97 Communications said it narrowed its losses by 42% to Rs 1,701.01 crore in the financial year ended March 31, 2021. The parent group has 41 subsidiaries, joint ventures and associate companies.