Alibaba will make $730 million from Paytm IPO, Vijay Shekhar will earn $54 million

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Alibaba will make $730 million from Paytm IPO, Vijay Shekhar will earn $54 million
Vijay Shekhar Sharma, CEO of One97 CommunicationsBCCL
  • SoftBank will be selling shares worth ₹1,689 crore or $225 million in Paytm’s IPO.
  • Paytm is seeking a valuation of $19.3- $19.9 billion with this public issue.
  • The company’s IPO will open from November 8 to November 10.
One 97 Communications — the parent company of digital payments giant Paytm — will launch its initial public offering (IPO) on November 8 to raise ₹18,300 crore ($2.4 billion).

This is India’s largest IPO to date, surpassing Coal India’s ₹15,000 crore public issue raised in October 2010.

Paytm intends to raise nearly ₹8,300 crore through fresh issues, while the rest ₹10,000 crore would come as an offer for sale (OFS) from the existing stakeholders in the company.

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According to the red herring prospectus (RHP), Vijay Shekhar Sharma will be looking to sell shares worth ₹402 crore ($53 million) in Paytm IPO.

Meanwhile, China-based Alibaba Group is expected to make the most out of Paytm’s IPO. Its affiliate entities — ANT Group and Alibaba.com — will be selling shares worth ₹5,488 crore (about $733 million) cumulatively. This is nearly 30% of Paytm’s IPO size.

Stakeholders Offer for Sale
Vijay Shekhar Sharma₹402 crore
Ant Group₹4,700 crore
Alibaba Group₹784.8 crore
SoftBank₹1,689 crore
Elevation Capital (previously called SAIF)₹2030 crore
Source: Paytm's RHP

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SoftBank will be selling shares worth ₹1,689 crore ($225 million) in Paytm’s IPO.

Paytm is seeking a valuation of $19.3- $19.9 billion with this IPO. The company was last valued at $16 billion in 2019, after it raised a billion dollars from several investors. It is currently the highest valued fintech startup in the country.

One97 Communications works in several verticals — digital payments, commerce, lending and insurance. It also owns an ecommerce business Paytm Mall and a payments bank Paytm Payments Bank, which are not a part of the current public issue.

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Earlier, it was reported that Paytm had decided to skip its pre-IPO round over valuation differences. However, Madhur Deora, president and group chief financial officer of Paytm, highlighted that the company decided to skip its pre-IPO round as it is a lengthy process and it wanted to meet the deadline it had set for itself.

The company’s IPO will open from November 8 to November 10, at a price range of ₹2,080 - ₹2,150 per equity share.

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