$2.2 billion IPO filed for Indian payments processor Paytm

Paytm, a Noida-based Indian digital payments startup, announced filing to go public via IPO, with plans to raise $2.2 billion (166 billion rupees), according to papers submitted to India’s market regulators.

The company says it plans to use the upcoming capital to expand its payment services, explore acquisitions and enter into new initiatives. Paytm was the most valuable startup in India, until Byju raised $350 million in early June.

Paytm will issue 83 billion rupees ($1.11 billion) worth of new shares and offer sales of another 83 billion rupees worth of shares from existing shareholders, including Softbank, Ant Group and Berkshire Hathaway, according to CNBC.

Founded in 2009 by CEO Vijay Shekhar Sharma, the platform offers a range of digital payment services, including digital wallets, bank accounts, BNPL, sub-wallets, money management accounts and debit and credit cards. Paytm is also a fully licensed digital bank and offers insurance, wealth management and cloud and commercial services.

“We offer our consumers a wide selection of payment options on the Paytm app, which includes Paytm Payment Instruments, which allow them to use digital wallets, sub-wallets, bank accounts, buy-now-pay-later and wealth management accounts and major third-party instruments, such as debit and credit cards and net banking,” the company said in its filing draft.

The IPO will be important for Paytm, who reported $233.6 million in losses in the previous fiscal year. Compared to the $404 million in losses for the 2019 fiscal year, the company shows it is pulling in their spending but needs capital to continue pushing towards market leadership in India and expansion abroad, according to TechCrunch.

The company will now also have to compete with other startups in India, following the country’s new Unified Payments Interface (UPI), a new payments interface backed by India’s banks, which is helping new fintech compete in the payments sector.

Paytm says it had about 333 million users as of March 31 and already faces competition from large names in Google Pay, Walmart’s PhonePe and Facebook’s WhatsApp. The IPO will be instrumental in determining if Paytm can keep its footing among these giant-led payment platforms and the wave of traditional banks and startups utilizing UPI to offer fintech services to users.

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