With its $ 2.46bn target, Paytm, backed by Ant Group, SoftBank, Berkshire Hathaway, will become India’s largest IPO.
India will see its biggest donation to the public and the digital Paytm payment platform seeks to raise about $ 2.5bn, in a year that has already been a year of listing.
Paytm is sponsored by China’s Ant Group Jack Ma Ant Group, Japan’s SoftBank and Warren Buffett’s Berkshire Hathaway, which owns one-third of the company.
The company was founded about 10 years ago by Vijay Shekhar Sharma, the son of a teacher who is said to have learned English by listening to rock music.
He was selected as the youngest billionaire in India four years ago at the age of 38 and now has a net worth of $ 2.4bn, according to Forbes.
His share of about 14 percent will make him the richest man with the IPO that opens on Monday.
Paytm will offer 83 billion new shares ($ 1.1bn), while existing ones will sell $ 1.34bn shares, according to expectations.
The IPO is expected to make Paytm India the most valuable technology company in India with a value of $ 20bn, up 25 percent from the past two years.
The platform was launched in 2010 and has become synonymous with digital payments in a country that is often funded.
It has benefited from government spending cuts – including spending almost all of the money sold five years ago – and more recently, from COVID.
“I didn’t know the crown[virus pandemic] It would have happened but Paytm helped me a lot during the epidemic, “Naina Thakur, who owns a grocery store, told AFP.
Thakur said about one-third of his customers pay for milk, bread and other daily items through Paytm.
“It’s a lot easier than a bank transfer because they just need my mobile number to pay and I get the money in less than seven hours,” he said.
Thakur is one of India’s nearly 22 million shopkeepers, taxi and rickshaw operators and other vendors earning up to 10 rupees ($ 0.13) using blue and white QT QR stickers.
The platform had 114 million users a year, according to a company report in July.
The company said it traded more than $ 54bn in the 2020-21 financial year.
The number of mobile payments in India has risen sharply over the past four years, reaching 26 billion in 2020-2021.
Mumbai’s investment firm Motilal Oswal estimates that mobile phone payments in the country will exceed $ 3.1 trillion in value by 2026.
‘Clear future losses’
But Paytm has been constantly damaged and is not sure if it will make a profit. It also said that $ 17 billion had been lost ($ 231.6m) last year to an estimated $ 32 billion ($ 436.1m).
“We hope to continue to spend all that money is expected and we may not benefit in the future,” he warned.
Paytm has reported a decline in spending over the past three years, largely due to job losses.
With its target of $ 2.46bn, Paytm will exceed $ 2bn of Coal India in 2010 to become the largest IPO in India.
Prior to that, Paytm raised Rs 82.35 billion ($ 1.1bn) from 74 depositors, including BlackRock and the Canadian Pension Plan Investment Board last week.
Paytm will offer shares at a price of 2,080-2,150 rupees ($ 27.9- $ 28.9) on delivery, which is expected to close Wednesday.
Hemang Jani, chief executive of business, at Motilal Oswal Financial Services, told Al Jazeera that although there was a desire for professional and innovative business in India and around the world, “investors sometimes ask questions about business, profitability and cash flow. “.
Indian companies have raised $ 9.7bn through IPOs in 2021 so far, figures from the Prime Database market have shown.
Zomato’s food giant was the largest IPO in the country to date with its share of $ 1.3bn in July.