Paytm IPO: Latest GMP, key things to know ahead of India's biggest public issue

 Paytm has raised shares worth ₹8,235 crores ($1.11 billion) from more than 100 institutional investors, including the government of Singapore, ahead of what is expected to be India's largest stock market listing. Paytm's parent One97 Communications will come out with its initial public offering (IPO) next week on Monday, November 8 with the price band fixed at ₹2,080-2,150 per share.

Paytm shares premium has slipped in the grey market from yesterday and is commanding a premium of ₹125 today, say, market observers. The shares of the company are expected to list on leading stock exchanges BSE and NSE on November 18, 2021.

The IPO, which concludes on November 10, comprises issuance of fresh equity shares worth ₹8,300 crore and Offer for Sale (OFS) by existing shareholders to the tune of ₹10,000 crore. Paytm's IPO is likely to be the biggest in the country's corporate history, breaking a record held by Coal India Ltd, which raised over ₹15,000 crore more than a decade earlier.

The company plans to use proceeds of the fresh issue to grow its business lines and acquire new merchants and customers. Paytm skipped the pre-IPO funding round to expedite the launch of the initial share sale.

Launched a decade ago as a platform for mobile recharging, Paytm grew quickly after ride-hailing firm Uber listed it as a quick payment option. Its use swelled further in 2016 when a ban on high-value currency banknotes in India boosted digital payments. Paytm has since branched out into services including insurance and gold sales, movie and flight ticketing, and bank deposits and remittances.

Several companies including Paytm have tapped capital markets this year in a fund-raising frenzy on the back of record highs hit by the Indian stock market, which has outperformed Asian peers so far this year.

The grey market premium (GMP) of digital payments and financial services firm Paytm is trading in a range of Rs 125 to Rs 135 per share. The initial public offering (IPO) has a price band of Rs 2,080 to Rs 2,150 per equity share.At the current GMP, the firm is likely to be listed at Rs 2,285 per share.

The share sale will open for subscription on November 8 and close on November 10.

Lot size of the IPO is a minimum of six shares for which one will have to spend Rs 12,900.

A maximum of 15 lots comrising 90 shares can be applied for by spending Rs 1,93,500.

The Vijay Shekhar Sharma-led firm has raised Rs 8,235 crore from anchor investors on November 3. Blackrock, CPPIB, Birla MF, GIC and other blue-chip funds participated in the anchor fund-raising round leading to 10 times oversubscription of shares.

The Paytm IPO, if successful, will be the country's largest share sale with the firm aiming to raise Rs 18,300 crore.

The IPO will surpass Coal India (Rs 15,475-crore IPO) and Reliance Power (Rs 11,700 crore IPO) in terms of issue size.

The company has raised its issue size from Rs 16,600 crore ($2.2 billion).

The IPO comprises a fresh issue of equity shares of the face value of Rs 1 each, aggregating to Rs 8,300 crore and the offer for sale by the existing shareholders, aggregating to Rs 10,000 crore.

The Noida-based firm will use the proceeds of share sale to strengthen its payment ecosystem and for new business initiatives and acquisitions.

JPMorgan Chase, Morgan Stanley, ICICI Securities, Goldman Sachs, Axis Capital, Citi and HDFC Bank are the booking running lead managers to the issue.

On October 22, Paytm had received market regulator Sebi's nod for the share sale.

Large investors such as Jack Ma's Ant Group Co and Masayoshi Son's SoftBank Group Corp will sell their stake through the IPO.

Through the offer for sale (OFS), One97 Communications Managing Director and CEO Vijay Shekhar Sharma will sell shares worth up to  Rs 402.6 crore while Antfin (Netherlands) Holdings will sell shares to the tune of  Rs 4,704 crore.