In another decisive step towards a public market listing, One97 Communications, the parent entity of digital payments app Paytm, on Tuesday told shareholders that it plans to propose an initial public offering (IPO) of its equity shares, which has been approved by its board of directors.
The proposed (IPO is expected to include fresh issue of equity shares by the Noida based company and/or an offer for sale of equity shares by existing shareholders, per a copy of the letter to shareholders reviewed by TechCircle.
Paytm informed the shareholders that they may participate in the IPO by selling either all or a part of the equity shares held by them. “We wish to inform you that the Offer for Sale component has to be finalised before filing the DRHP with SEBI. However, the price band for the IPO will be determined at a later stage,” it said.
In the event the total number of equity shares being proposed for sale by all the selling shareholders exceeds the size of a decided mark, sales will be allowed in proportion to shareholding or as decided by the directors.
Apart from any shares that are sold in a potential Paytm IPO or shares such as those held by current and former employees, the entire pre-IPO equity share capital of the company will be locked-in for a period of one year from the date of allotment of equity shares in the IPO, according to SEBI regulations.
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.
In its annual report, One97 Communications said it booked losses totaling to Rs 1,701.01 crore in the financial year ended March 31, a 42% dip from a year ago. The parent group has 41 subsidiaries, joint ventures and associate companies.