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

• 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.

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.

Source: Paytm's RHP

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.

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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