Ant-Backed Indian Payment Platform Paytm Opens IPO Subscription

The parent of Ant Group-backed Indian digital payment platform Paytm has opened its initial public offering for subscriptions, as it tracks to grow the Chinese fintech’s portfolio of multibillion-dollar overseas listed companies.

One 97 Communications Ltd. is expected to raise around 185 billion rupees ($2.5 billion) over a three-day subscription window which kicked off Monday. That could make it the biggest IPO in Indian history, surpassing the 2010 record set by coal producer Coal India Ltd. It plans to go public on both the National Stock Exchange of India and Bombay Stock Exchange around Nov. 18.

By the end of the first day, 18% of the shares on offer had been snapped up, according to Bloomberg Quint. Retail investors seemed optimistic about the deal, with 78% of their quota subscribed, while non-institutional investors had taken 2% of the released quota, and qualified institutional buyers 6%.

According to its plan, the company reserved 15% of the total IPO shares for retail investors, 10% for non-institutional bidders, and the remaining 75% for qualified institutional buyers.

Paytm is India’s largest digital payment platform, offering payment services and financial products to 333 million registered customers and 21.1 million merchants as of March 31, its preliminary prospectus reads.

Operating revenue dropped 10% yearly to 31.9 billion rupees in the year to March, while net loss narrowed 42.1% year-on-year to 17 billion rupees.

The company has reported net losses for the past three years and expects those to continue “for the foreseeable future” as it ramps up spending on staff, operational expansion and infrastructure, according to the prospectus.

Since its founding in 2010, Paytm has had 11 rounds of fundraising, with a list of investors that includes Ant Group, Alibaba Group, Elevation Capital, SoftBank Group Corp., and Warren Buffett’s Berkshire Hathaway.

Ant Group is currently its largest single shareholder. It originally owned 29.6% of the company via a subsidiary based in the Netherlands but cut its holdings to 25% right before the IPO process began in accordance with Indian rules.

Ant’s affiliate Alibaba Group holds another 7.2% of the company through a Singaporean unit. The e-commerce giant has shared core technologies with Paytm, including those dealing with cybersecurity risk management, fraud prevention, and money laundering.

If the IPO reaches its fundraising goal, Paytm will be valued at $20 billion.

The listing is likely to add to Ant Group’s portfolio of overseas listed companies worth billions of dollars, shortly after Korean mobile wallet Kakao Pay’s name was added. Kakao Pay debuted in Seoul on Wednesday, securing a market value of $21.2 billion.

In July, another Indian startup backed by Ant Group, food delivery platform Zomato, also went public in the country. Its debut on the National Stock Exchange of India gave it a value of about $12 billion.

Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

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