Paytm IPO share allotment likely next week at ₹2,150 per share
Digital payments and financial services firm Paytm is likely to allot shares at the upper price band of Rs 2,150, which is expected to arrive on Monday, after markets regulator SEBI’s nod on November 16, sources aware of the development told PTI.
The first allotment was expected on Monday and Paytm Money app also displayed the same.
One of the sources said, “Paytm share allotment is likely to happen on Tuesday after SEBI’s nod. SEBI approval is expected on Monday.”
Based on the bids received for Paytm’s Rs 18,300 crore initial public offer (IPO), the company will list an enterprise valuation of Rs 1,49,428 crore or a little over USD 20 billion at an exchange rate of 74.35.
The country’s biggest IPO was subscribed 1.89 times, with institutional buyers including FIIs flooding the sale of shares, demanding 2.79 times the number of shares reserved for them. The company saw participation from blue-chip investors like BlackRock, Canada Pension Plan Investment Board, GIC, ADIA, APG, City of New York, Texas Teachers Retirement, NPS Japan, University of Texas, NTUC Pension from Singapore, University of Cambridge etc. ,
Retail investors enjoyed 1.66 times of the 87 lakh shares reserved for them. Paytm is all set for a bumper listing on November 18, and will be one of the most valuable companies in India. Its large issue size meant that the actual value of its retail size was much larger than that of recent internet IPOs like Zomato or Nykaa.
Some of the biggest IPOs in the past like Coal India saw the highest number of subscriptions on the last day of bidding. Coal India was closed 15.28 times on the last day. The same trend was observed in the recent past as well, with much smaller IPOs such as Nykaa and Policybazaar, where QIB bids exceed 90 per cent, and overall bids also came on the third day.
Paytm’s IPO includes a fresh issue of equity shares worth Rs 8,300 crore and an offer for sale (OFS) of shares up to Rs 10,000 crore. The OFS, or secondary share sale, consisted of the sale of shares worth up to Rs 402.65 crore by founder Vijay Shekhar Sharma.
The company set aside 75 per cent for QIBs, 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.
Established in 2000, One97 Communications is India’s leading digital ecosystem for consumers and merchants. It provides users with a wide range of services – payment services and financial services.
According to a report by Reliance Securities, the IPO is valued at 43.7 times FY2021 price-to-sales and 36.7 times FY22 annual price-to-sales at a discount of around 12 per cent. Is. Recently listed for Unicorn, Zomato.
“While there is no listed peer available for Paytm in the domestic market, we believe that high valuations for unicorns like Paytm, which have created significant scale and brand equity, are likely to remain. A strong 33 per cent CAGR in GMV in 2019- FY21, despite the pandemic, reaffirms Paytm’s leadership and brand value,” the report said.
Canara Bank Securities said valuation of the issue is costly on price-to-book (P/B) ratio and recommended long-term subscription.
“The company has displayed substantial growth in user base and GMV since its inception in the fin-tech sector. Furthermore, the business is scalable due to the high convenience of digital banking. However, the valuation appears costly at a P/B of 49.74. Times for FY’21. Thus, we recommend to subscribe for this issue for a longer period,” the report said.
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