The mega 18300 crore IPO of One97 Communications, the parent company of Paytm, a one-stop payments service provider is all set to hit the market on 8th November 2021 and will be available for subscription till the 10th of November 2021.
The proceeds from the IPO would be used to develop and strengthen the Paytm ecosystem including through acquisition and retention of consumers and merchants and providing them with greater access to technology and financial services. Besides this the company also intends to invest in new business initiatives, acquisitions, and strategic partnerships, besides general corporate purposes.
Some quick facts about the Paytm IPO:
Price band of Paytm IPO
The price band for the IPO is between Rs. 2080 to Rs. 2150 per share.
Lot size
The minimum lot size is of 6 shares.
Issue size
The issue size for Paytm IPO is Rs.18300 crores.
Listing date
Shares of Paytm IPO are expected to be listed around 18th November 2021.
Key strengths and opportunities
Company has built a huge ecosystem allows it to address large market opportunities across payment services, commerce and cloud services and financial services. The market segments where the company operates and caters to are significantly underpenetrated and offers a huge opportunity for scalability and growth due to the immense potential of technology.
Strong brand recall value
Paytm has a strong brand recall value among merchants compared to its peers in the digital payment platforms.
Multiple payments platform
The company offers a wide variety of payment platforms which provides large scale and reach. As of March 31, 2021 the company had a base of 333 million customers and more than 21.1 million merchants. With deep insights of Indian consumers and merchants the company claims to have developed unparalleled insights into the saving and spending habits of consumers, and the manner in which merchants operate their businesses.
To increase its profitability in the long term, the company is aiming to achieve continuous growth in Gross Merchandise Value (GMV) of transactions, as well as add new merchants in addition to retention of existing merchants.
Key factors to consider while investing in Paytm IPO:
In its Red Herring Prospectus, the company has listed some factors which may impact the future performance of the company, such as:
The company’s profitability could be negatively affected if there is a significant increase in the payment processing charges payable to financial institutions and card networks , and the company is unable to pass on the same to their merchants or consumers.
The conduct of company’s business is subject to certain statutory and regulatory licenses and approvals. Any failure or omission to obtain, maintain or renew these licenses and approvals could adversely affect the company’s business and results of operations.
The company has also stated that in its Red Herring Prospectus that it has incurred net losses for the last three years, including a restated total comprehensive income/(loss) for the year including discontinued operations of Rs.(42,355) million, Rs. (29,433) million and Rs. (17,040) million in FY 2019 and may not achieve or maintain profitability in the future.
To invest in the Paytm IPO here.
– Written and contributed by Pradeep Sukumaran.
