Paytm creates history, India’s biggest IPO bid ends with 1.89x oversubscription

New Delhi: Paytm, India’s leading digital payments and financial services platform has closed the bid/offer for its IPO by oversubscribing 1.89 times.

From being once India’s most valuable unicorn to today on the verge of making its debut in the country’s largest stock exchange, the company stands as a testament to the true Indian entrepreneurship story.

The largest IPO in subscription was witnessed by QIBs over 2.79 times and retail investors over 1.66 times at the end of the third day, according to data from exchanges. A total of 9,14,09,844 Paytm shares have been bid for, as against 4,83,89,422 shares available.

Paytm IPO has seen surplus demand in the form of bids by QIBs, domestic institutional investors and mutual funds on the last day of the IPO offer. Historical records prove that when it comes to large IPOs, retail investors place bets on the first day, QIBs and HNIs invest in the latter days of membership.

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 just 1.71 times on the second day, but closed at 15.28 times on the last day. The same trend was observed in the recent past as well, and much smaller IPOs like Nykaa and Policybazaar, where QIBs accounted for more than 90 per cent of the bids, and the overall bids also came on the third day.

Earlier on the first day, Paytm’s IPO had achieved the highest ever retail percentage subscription for an IPO with a retail size of over Rs 1,000 crore in the past decade, which was later oversubscribed at the beginning of the second day.

With IPOs that are as big as Paytm, subscriptions cannot be viewed like the recent Internet IPOs. Paytm’s big issue also meant that its retail size is similar to that seen in recent internet IPOs like Zomato or Nykaa in terms of value.

Now all eyes are on when Paytm will ring the bell on the stock exchange. Paytm, if listed, would be one of the most valuable companies in India. Paytm will enter the market with a valuation of $20 billion. Analysts at Reliance Securities also spoke of Paytm’s valuation saying it is worth it as it has created “significant scale and brand equity which is likely to be maintained”.

The company is expected to list itself by November 18.

Paytm closed India’s biggest anchor round on November 3 as it raised Rs 8,235 crore. Blue-chip global investors and tech-focused funds have made their first exposure to the Indian public markets through Paytm IPO, while investment giants such as BlackRock, CPPIB and GIC have placed their biggest bets in Indian IPOs.

The company has attracted world’s top pension funds such as Government of Singapore, CPPIB, ADIA, APG, City of New York, Texas Teachers Retirement, NPS Japan, University of Texas, NTUC Pension, Superannuation Fund as well as Sovereign Wealth Fund. Singapore, and the University of Cambridge.

Dedicated investors from the largest emerging markets such as Standard Life Aberdeen, UBS and RWC have also participated in Paytm’s anchor round.

Paytm, which started as a mobile wallet in 2009, has added many more businesses – Paytm Payments Bank, Paytm Payments Gateway, Paytm Payout, Paytm Money, Paytm Insider, Paytm Insurance, Paytm Postpaid (Buy Now, Pay Later) Make payments) ), Paytm for Business, Paytm Credit Card, Paytm First Games as well as utility bill payments, offline merchant payments, rental payments, content and much more.

The company has seen a huge increase in its revenue driven by its payment and financial services offering. The company’s revenue grew by 46 per cent to Rs 9,480 million in Q1FY22 as against Rs 6,494 million in Q1FY21.

It is on a profitable path as the company has already reported contribution margin profits. Paytm has also become a financial services company, which brings with it more opportunities. Paytm’s payments and financial services alone contribute to about 80 per cent of its revenue.

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