Paytm likely to allocate shares at upper price band on Tuesday: sources

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Paytm likely to allocate shares at upper price band on Tuesday: sources

According to sources, Paytm is likely to allocate shares at the upper price band of Rs 2,150 apiece on November 16 after market regulator SEBI approves, which is expected to come on Monday.

The allocation was to take place on Monday and the Paytm Money app displayed the same, as was expected to take place on Monday.

After approval of SEBI, paytm share allocation is likely to take place on Tuesday. One of the sources said that the approval from SEBI is expected to come on Monday.

According to the bid received for Paytm's initial public offering IPO, the company will list an enterprise valuation of Rs 1,49, 428 crore or slightly over $20 billion at an exchange rate of 74.35.

The country's biggest IPO was subscribed 1.89 times with institutional buyers flooding the share sale with offers seeking 2.79 times the number of shares reserved for them. The participation of 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 out of Singapore, University of Cambridge, etc. was among the many investors who participated in the company.

Retail investors lapped up for 1.66 times the 87 lakh shares reserved for them.

Paytm is expected to be listed on November 18, and will be one of India's most valued companies.

Its large issue size meant that the sheer value of its retail size is much larger than that seen in recent internet IPOs like that of Zomato or Nykaa.

Some of the largest IPOs before, like Coal India's, had seen the highest number of subscribers on the final day of bidding. On the last day, Coal India had closed 15.28 times. More than 90 per cent of the bids came in on Day 3 for recent, and significantly smaller IPOs like Nykaa and PolicyBazaar.

Paytm IPO comprised equity shares worth Rs 8,300 crore and an offer for sale OFS shares worth up to 10,000 crore.

The OFS sale of shares was a result of the sale of shares worth up to Rs 402.65 crore by founder Vijay Shekhar Sharma.

The company set aside 75 per cent of the offer for QIBs, 15 per cent for non-institutional investors, and the remaining 10 per cent for retail investors.

One 97 Communications was founded in 2000 and is India's leading digital ecosystem for consumers and merchants. It offers a wide range of services to the users - payment services and financial services.

According to a report from Reliance Securities, the IPO is valued at 43.7 times of the financial year FY 2021 price-to- sales and 36.7 times FY 22 annualized price-to- sales, which is a 12 per cent discount to the recently listed unicorn, Zomato.

While there is no listed peer available for Paytm in the domestic market, we believe that the high valuations for unicorns like Paytm, which have created significant scale and brand equity, are likely to sustain. The report said that a strong 33 per cent CAGR in GMV over FY 19 -- FY 21 vindicates Paytm's leadership and brand value, despite the pandemic.

Since its inception in the Fintech sector, the company has seen a lot of growth in user base and GMV. The business is scalable due to the high convenience of digital banking. The valuation appears to be expensive for FY 21 at P B of 49.74 times. We recommend that you do not give any advice on this topic.