Sunil Munjal, Saroj Poddar likely to invest in Paytm; may reach $6 billion in valuation

Industrialists are now taking keen interest in Paytm and as per several reports, Hero’s Sunil Munjal and Adventz Group’s Saroj Poddar are in talks to buy a stake in Paytm.

If everything goes well, the investment will boost the value of Paytm's parent One97 Communications and may take its valuation of $6 billion.

Reportedly, Munjal, the chairman of Hero Corporate Services, and Poddar, chairman of fertiliser and engineering services conglomerate Adventz Group, are negotiating a stake purchase from early investor and former IDFC Securities analyst Nikhil Vora.

The deal will mark a partial exit for Vora who owns about 1.6 lakh shares - a 0.35% share - in the Alibaba backed company.

"They (Munjal and Poddar) will buy Rs 50 crore worth secondary stock at Rs 8,000 per share," one of the persons cited above, told ET.

Paytm, earlier received funding from Taiwan's MediaTek in August when it was estimated to be worth $4.8 billion. This deal, if successful, will see the company valued at $5.5-6 billion, according to the sources.

A boost in valuation can help the payments company - which has registered rapid growth in recent weeks due to the government's demonetisation exercise - command a better value when it seeks fresh institutional funding in the coming weeks.

Paytm has seen business boom with transactions going up from 2.5 million per day to 7 million in November.

The company is now focussed on growing its business in rural markets by offering local language support and new services for payments on feature phones.

Vijay Shekhar Sharma, the founder of One97, told ET that his aim was to "move ahead from payments and offer a full bouquet of personal banking services in 2017". The payments bank, when launched, will offer fully portable accounts and even cashout features that a wallet company cannot do.

Large conglomerates like Reliance Industries, Aditya Birla Group and RPG (RP Goenka) Group meanwhile are looking to back ventures closer to their own businesses.