Paytm’s Rs 18,300-cr IPO gets subscribed 1.89 times on Day 3

Financial services firm Paytm’s initial public offering (IPO), worth Rs 18,300 crore, on Wednesday got fully subscribed on the third day of bidding.

As per data available on the BSE, Paytm IPO has been subscribed 1.89 times so far, with the qualified institutional buyers (QIBs) tranche being subscribed 2.79 times.

A total of 9,12,99,714 Paytm shares were bid for, as opposed to the 4,83,89,422 shares available.

On the first day of Paytm’s IPO, it had secured the highest ever retail percentage subscription for IPOs with retail sizes in excess of Rs 1,000 crore.

Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies) have also placed their bids on Day 3.

As expected, QIBs had placed their orders on the final day of the IPO bid.

Analysts at Canara Bank Securities said in a note on November 3 “Subscribe for the long term” for the Paytm IPO. “The company exhibits substantial growth in user base and gross merchandise value since its inception within the fintech sector. Moreover, the business is scalable due to high convenience of digital banking,” said the analysts.

Paytm, which started off as a mobile wallet in 2009, has gone on to add many more businesses — Paytm Payments Bank, Paytm Payments Gateway, Paytm Payout, Paytm Money, Paytm Insider, Paytm Insurance, Paytm Postpaid (Buy Now Pay Later), Paytm for Business, Paytm Credit Cards, Paytm First Games along with utility bill payments, offline merchant payments, rental payments, content and much more.

“A strong 33% CAGR in GMV over FY19-FY21, despite the pandemic, vindicates Paytm’s leadership and brand value. This along with 17% estimated CAGR in digital payments in value to $40 trillion during FY21-FY26 indicates a sustainable growth in the long run,” said a report from Reliance Securities.

“Given that the company’s ecosystem allows it to address large market opportunities, scale and reach, product, technology and leadership – We give this IPO a “Subscribe (Long-Term)” rating,” said analysts from Anand Rathi. Analysts from the leading financial and investment advisory also listed Paytm’s ecosystem, trusted brand and scale, the company’s insights of Indian consumers and merchants, its technology DNA, leadership and culture as well as the network effect it creates as its strengths.

Paytm has also grown to be a financial services giant, which brings with it more opportunities. Paytm’s payments and financial services alone contribute to almost 80 per cent of its revenue.

Paytm had closed India’s largest anchor round on November 3 as it raised Rs 8,235 crore. Blue-chip global investors and tech-focussed funds have made their first-ever investment in Indian public markets through the Paytm IPO while investment giants like Blackrock, CPPIB and GIC have made their largest bets in an Indian IPO. The company has also attracted world’s top pension funds, superannuation funds as well as sovereign wealth funds like Government of Singapore, CPPIB, ADIA, APG, City of New York, Texas Teachers Retirement, NPS Japan, University of Texas, NTUC Pension out of Singapore, University of Cambridge. The largest Emerging Markets dedicated investors like Standard Life Aberdeen, UBS, RWC have also taken part in Paytm’s anchor round.

The company opened for bid/offer on November 8 and was open till November 10. The price band for the Paytm IPO has been kept in the range of Rs 2,080-2,150, as Paytm targets a $20 billion valuation. The company is set to raise Rs 18,300 crore from the markets through a fresh issue of Rs 8,300 crore and an offer for sale of Rs 10,000 crore.