Paytm IPO: Stock price spikes by 70 percent

After the announcement of its initial public offering (IPO), the Paytm stock has been in great demand in the grey market. Over the past four days, the stock price has risen to Rs 21,000 from Rs 11,500. Investors remain willing to pay a premium on current prices, but no one is selling now.

A few days back, the digital payment service company Paytm, made an announcement where it said that it is going to file an IPO later this year in the month of November worth $3 billion. This deal has led to a huge spike in the shares of the company.

Manish Mittal, from Mittal Portfolios, which deals in unlisted and delisted shares, told the media that no stocks are available for purchase at the moment.

Paytm board gives in-principle approval for IPO

Earlier on May 28, Paytm’s eight-member board met to give their approval for a $3 billion initial public offering (IPO). Making it the biggest in India’s history. It is aiming to list in India in November this year at a valuation of $25-$30 billion. In 2019, the company valued at $16 billion when it raised $1 billion from Softbank and Ant Financial.

They received in-principle approval from the company’s board to raise around Rs 22,000 crore through an IPO during October-December. The digital payments and financial services firm is looking at an enterprise value of over Rs 2 lakh crore.

Major shareholders of Paytm

Alibaba’s Ant Group owns 29.71% of shares and Soft Bank Vision owns 19.63% of company shares. Another shareholder, Saif Partners holds 18.56% of total shares. Vijay Shekhar Sharma, the founder and CEO of Paytm, himself holds the acquisition of 14.67% of the company’s shares.

Other share-holders include AGH Holding, T Rowe Price, and Discovery Capital, and Berkshire Hathaway who hold the acquisition of less than 10% of the company stakes.

The company also reported that they were able to narrow down the losses by 40 percent on a year-on-year basis in the fiscal year 2019-20.

Other companies launching their IPO

Many of the budding businesses in the country like Delhivery, Policybazaar, MobiKwik, and Nykaa are gearing up to launch their Initial Public Offerings.

Back in April, Zomato filed their preliminary papers for an IPO with the capital market regulator- Sebi to raise funds of $ 1.13 billion which comes up to around ₹8,250 crores.

Do read our other analysis also.

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