One 97 Communications Limited IPO: Opens tomorrow; key details that investors must know before investing

One 97 Communications Limited, the parent company of India's leading digital financial services company, Paytm, will launch its initial public offering (IPO) for subscription tomorrow, i.e., November 8, 2021. The company has fixed the price band at Rs 2,080-2,150 per share for the offer as it seeks to raise around Rs 18,300 crore from the issue. The issue will come to a close on November 11, 2021.

The bid lot size is 6 Equity Shares and in multiples thereof. At the upper price band, investors will have to pay Rs 12,900 to get a single lot of One97 Communications. Of the total issue, 75 per cent will be reserved for Qualified Institutional Buyers (QIB), 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.

The issue comprises a fresh issue of equity shares worth Rs 8,300 crore and an offer for sale of Rs 10,000 crore (including Anchor portion of 3,83,02,326 Equity shares). Paytm's fundraising plan from the IPO is the biggest ever to date in India. Before this, state-run coal mining company Coal India had the biggest IPO of more than Rs 15,000 crore in October 2010.

The OFS will be carried by promoters like founder Vijay Shekhar Sharma, Antfin (Netherlands) Holding B.V, Alibaba.Com Singapore E-commerce Private Limited, Elevation Capital V FII Holdings, Elevation Capital V Limited, SAIF III Mauritius Company, SAIF Partners Capital India IV, SVF Panther and BH International Holdings among others.

Founder Vijay Shekhar Sharma will sell Rs 402.65 crore worth of shares through OFS. Among investors, Antfin (Netherlands) Holding B.V. will sell up to Rs 4,704.43 crore worth of shares, Alibaba.com Singapore E-Commerce will offload Rs 784.82 crore of shares, SVF Panther (Cayman) Rs 1,689.03 crore, and BH International Holdings will sell Rs 301.77 crore worth of shares via OFS.

Morgan Stanley India Company Private Limited, Goldman Sachs (India) Securities Private Limited, Axis Capital Limited, ICICI Securities Limited, J.P. Morgan India Private Limited, Citigroup Global Markets India Private Limited and HDFC Bank Limited are the Book Running Lead Managers of the issue. Axis Bank Limited is the sponsor bank for the purpose and Link Intime India Private Limited is the registrar for the issue.

The Net Proceeds of the raised funds will be used in Growing and strengthening our Paytm ecosystem, including through the acquisition of consumers and merchants and providing them with greater access to technology and financial services (Rs 4,300 crore); investing in new business initiatives, acquisitions and strategic partnerships (Rs 2,000 crore) and general corporate purposes.

One 97 Communications Limited incorporated in 2000 is India's leading digital ecosystem provider for consumers and merchants. In 2009, it launched Paytm, as a "mobile-first" digital payments platform to enable cashless payments for Indians, giving them the power to make payments from their mobile phones. Starting with bill payments and mobile top-ups as the first use cases, and Paytm Wallet as the first Paytm Payment Instrument. It has built the largest payments platform in India based on the number of consumers, number of merchants, number of transactions and revenue as of March 31, 2021, according to RedSeer. Paytm is available across the country with "Paytm Karo" (i.e. "use Paytm") evolving into a verb for hundreds of millions of Indian consumers, shopkeepers, merchants and small businesses, according to RedSeer.

As per the Kantar BrandZ India 2020 Report, the "Paytm" brand is India's most valuable payments brand, with a brand value of US$ 6.3 billion, and Paytm remains the easiest way to transact across multiple methods.