Paytm: Company may go straight for IPO to fast-track listing without pre-IPO

Paytm provides payment services, commerce and cloud services and financial services to over 333 million consumers and over 21 million merchants (as of March 31, 2021).

Fintech giant Paytm may skip pre IPO share sale

Paytm is headed for an IPO of $2.2 billion. Multiple sources confirmed on Friday that the fintech giant is considering not going ahead with pre-IPO plans, in order to fast-track the company’s market launch timeline. Sources said the company does not want to add additional steps in the IPO and is mostly headed towards direct listing.

Paytm: Company may go straight for IPO to fast-track listing without pre-IPO
Paytm: Company may go straight for IPO to fast-track listing without pre-IPO

However, the company’s plan to halt pre-IPO growth, which is yet to be confirmed, is not related to any valuation gap, multiple sources aware of the developments said. Paytm is seeking a valuation of $20-22 billion for its IPO. The final value of the company was $16 billion. The company’s draft red herring prospectus (DRHP) also mentions that it may “consider” a pre-IPO placement.

May get SEBI nod soon

It makes sense to have a pre-IPO option in DRHP, a source said, “Pre-IPO is always an option for companies going for market launches and is not exercised by most of the companies. It is prudent to have a pre-IPO option in a DRHP, otherwise the company may not raise any primary capital. Companies end up not going for pre-IPO option as it only delays the process.

Paytm is the country’s leading financial services company and has built a multi-stack payment structure to generate revenue. According to sources, Paytm may soon get the green signal from the Securities and Exchange Board of India (SEBI) for the IPO.

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