Paytm IPO Details ,When Is Paytm IPO coming and Paytm IPO GMP. Get 100% return in Paytm IPO

 Paytm IPO Details ,When Is Paytm IPO coming and Paytm IPO GMP. Get 100% return in Paytm IPO

INTRODUCTION About Paytm IPO 

Hi ,you must be knowing that paytm’s parent company one97 communications 

IPO is opening for subscription from 8th nov. So , today we will review the RHP 

i.e, Red herring prospectus of paytm. First, we will start with the IPO’s objects.

OBJECTS 

The objects behind the issues are as follows:

1.Provide an exit route to existing shareholders who have invested in paytm.

2. Investing 4300 crores rupees in strengthening the paytm ecosystem 

including through acquisition and retention of consumers and merchants.

3. Investing 2000 crores rupees in new business intiatives, acquisitions, and 

strategic partnerships.

4. Some general corporate purposes.

So, these were the objects behind the company’s IPO.

About the company

Now let’s know about the company. One97 was started in 2001 by Mr. vijay 

Shekhar sharma. It was mainly involved in mobile – based services like live 

astrology , music messaging, and other SMS-based applications. In 2009, Paytm 

was founded with a intial investment of $2 million as a prepaid mobile and 

DTH recharge platform.

Paytm covers different services under its umbrella:-

1.Paytm wallet: Semi-closed wallet

2.Paytm Mall: Online shopping

3.Online ticket booking for travel and movies 

4.Bill payments 

5.Paytm Gold: Online gold platform

6.Paytm money : Stockbrooking & investment

Paytm has many world-famous investors with it. Like Alibaba group, Ant 

financial (which runs Alipay in china), SoftBank, SAIF Partners and Berkshire 

Hathaway (Warren Buffet’s company). Paytm owns 49% of Paytm Payments 

Bank (India’s largest payments bank). It has foreign subsidiaries in singapore in 

the merchant payments and eCommerce space. Paytm has over 337 million 

retail customers and 22 million merchants on its platform as of June 2021.

Paytm has 2 main revenue lines which are :

1. Payment and financial services: the payments business and financial 

services offerings given to retail customers. This vertical also includes 

the services and products sold to merchants like paytm Soundbox and 

POS.

2. Commerce and cloud services: all the eCommerce businesses of paytm 

like online shopping, ticket booking, etc. This segment also includes 

software, cloud and advertising services offered to merchants.

On the consumer side, High-frequency use cases like bill payments and money 

trasfers help in customer acquisition. Established products- Paytm wallet,

Paytm Postpaid, PaytmBank savings account, and FASTag help increase 

engagement & retain customers. These users can be further monetized for 

higher products including personal loans, investment and insurance. For 

merchants, offerings like instore QR or online payment gateway are the 

primary means of onboarding merchants. Product such as soundbox and POS 

devices and Paytm Business Payments, help increase engagement and retain 

merchants. After onboarding, these merchants can be monetized further for 

offerings like merchant lending, advertising and cloud services. Paytm is the 

largest payments platform in india with a GMV of Rs 4,033 billion in FY21. It 

has an overall mobile payments transactions market share of 40% and wallet 

payments market share of 60-70%. Paytm also runs Paytm Postpaid which is a 

buy now pay later product. Also, Paytm FASTags, Fixed Deposites, Debit & 

cards and others. Paytm also owns 55% of paytm first gzmes which is an online 

gaming platform involving Rummy and Sports Fantasy. Paytm first has over 28 

million users as of June 2021. So this was about paytm company.

Industry overview about Paytm 

Now we should also know about the industry in which it operates. The high

working age population in india, the rapid pace of urbanization and the rise of 

digital adoption and internet penetration. These factors are expected to lead 

to approx. 1 billion internet users in india by 2026. The total mobile payments 

market is expected to grow 5x to $3.06 trillion. Mobile payments from 

consumer to merchant are also expected to grow 7.6x to $800 million by FY26. 

The TPV or total payments value accepted by merchants is also expected to 

grow 4x to $1.1 - $1.4 trillion by FY26. The market opportunity in internet 

sector is growing rapidly with unique online users expected to grow 250-300m 

in FY21 to 700-750m by FY26. The fastest-growing sectors from FY21 to FY26 

are expected to be; Ecommerce with a CAGR of 28-31%; Online grocery with a 

CAGR of 43-49%; online food delivery with a CAGR of 36%. There are few 

sectors that have a huge presence in advanced economies like USA and China. 

But these services haven’t reached india’s big population like lending, credit 

cards, insurance , stock market participation etc. This showcases significant 

room for expansion for many consumer-facing segments in the financial 

services industry in india. So this was the overall view on online payments & 

the financial service industry.

Financial numbers

Now let’s talk about the company’s recent financial numbers. Let’s check the 

financial numbers. 

First we will compare FY20 end to FY21 end. We will see that both total assests 

and total revenue declined. Total assets decreased from 10303.10 crores to 

9151.30 crores in FY21. Similarly , total revenue decreased from 3540.70 to 

3186.80 crores. Profit after tax is showing a big loss number in FY20. In FY21, it 

is also in loss but comparatevily less that FY20. This figure became 1701 from 

2942.4.

Earning per share:-28 

Debt to equity:0.51

Current ratio : 2.71 

2-year sales CAGR :- 5.65%

After talking about financials, we will check the investment pros and cons.

Pros about Paytm IPO

First we will talk about the pros. Paytm’s biggest strength is it’s vast retail and 

merchant customer base. Paytm’s business model has strong network effects 

which enable its business to grow faster as more and more people use it. The 

customer base provides Paytm with large cross-selling opportunities across its 

products and services for both retail and merchant customers. A big strength

of Paytm is its wide variety of daily life use cases like bill payments, money 

transfers etc. Paytm’s core services and products are all technology enabled 

which provides them with the capability for rapid gowth and scale-up. For 

expansion in the small shops and kirana stores segment, Paytm has a lot of potentials. It is also the segment where financial and digital services haven’t 

reached properly. Paytm’s strong brand image should be very helpful in expanding in this segment. So these were a few positive points on Paytm. Now 

let’s talk about Paytm’s cons.

cons about Paytm IPO

For all of Paytm’s potential the company is still not profitable. It may continue 

in the future as well. The company is using its resources aggressively. The company is operating in lot of different segments. Although this enhances the customer reach, it also dilutes focus and prevents specializations in specific areas for the company. Paytm faces strong competition. 

It has to face strong competition from from financial players like HDFC bank , NBFCs like bajaj Finance etc. Technological disruptors like Zerodha, Navi Technologies and grow are also giving tough competition to Paytm. Paytm faces tough competition

with travel segment like Makemytrip in travel, Bookmyshow in event tickets, 

Flipkartand amazone in the eCommerce space. So to work in this segment and 

be a winner is a huge challenge for Paytm. With its heavy reliance on technology , Paytm has a risk of technological disruptions. This is because 

companies are bringing a new ideas and advanced technologies which may 

impact the existing companies tremendously. In such a situation , Paytm has to keep in mind the technological disruptions.

Paytm Ipo details

Now let’s talk about its IPO details. Opening date is 8th Nov 2021. Closing date 

is 10th Nov 2021 . Price band is Rs. 2080-2150 per equity share. 1 market lot is 

of 6 shares . Issue size is Rs. 18,300 crores, in which fresh is 8300 crores and 

offer for sale is 8300 crores. The listing date of this IPO is 18th Nov 2021.

So , this was a complete review of Paytm business and Paytm IPO details , when Paytm IPO is coming