Paytm board OKs India’s largest IPO; firm may file Rs 22,000 cr issue papers with SEBI next month

One97 Communications-owned Paytm has received in-principle approval from its board to float India’s biggest IPO to-date, it said in a letter to employees and other stakeholders. The company is also finalising the draft red herring prospectus (DRHP), which could be filed in the first week of next month, Bloomberg reported citing sources. Paytm expects to raise around Rs 22,000 crore from the public issue during the October-December quarter this financial year. Paytm, in the offer-for-sale (OFS) sent to its staff, informed that it has proposed to undertake an initial public offering of its equity shares, subject to market conditions, regulatory, corporate and other approvals, and other relevant considerations, in accordance with applicable law, and has received in-principle approval from the board of directors. Financial Express Online has the copy of the letter. So far, the Rs 15,200-crore Coal India’s IPO launched in 2010 is the country’s largest public issue.

The proposed IPO is likely to comprise fresh issue of equity shares and offer for sale of shares by existing shareholders of the company. “You may, in your sole discretion, participate in the Offer by offering either all or a part of the Equity Shares held by you (which are eligible to be offered in the Offer) in the offer for sale,” Paytm said in a letter. The price band for the Paytm IPO will be determined either at the time of filing the red herring prospectus (RHP) or prior to the IPO opening for the subscription. The final price will be determined through the book-building process prescribed under the SEBI ICDR Regulations and as shall be duly specified in the offer documents.

Paytm, in the 79-page letter, said that equity shares that are not sold in the OFS shall be locked in for a period of one year from the date of allotment of equity shares in the IPO. One may not sell equity shares during a one-year lock-in period. The equity shares offered in the OFS by selling shareholders need to be fully paid-up and are required to have been held by the concerned selling shareholder for a period of at least one year prior to filing the DRHP with SEBI. Therefore, June 27, 2021, shall be considered as the relevant date to determine the holding period of the offered shares.

The shareholders willing to subscribe to offer-for-sale have to submit their relevant documents such as power of attorney, consent letter, selling shareholder certificate, corporate authorisations.