5 factors to keep track of in Paytm’s IPO

Vijay Shekhar Sharma has been modelling Paytm on Ant Financial, trying to build a payments-to-commerce super app. But the Chinese company grew in a duopoly market where multinational firms were prohibited. Can Sharma replicate its success in India while taking on Google, Amazon and Walmart?

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By 

Pratik Bhakta

Madhav Chanchani

July 19, 2021

12 Min Read

Paytm, among India’s most valuable internet companies, filed for a Rs 16,600 crore, or $2.2 billion, public share offering on Friday just as Zomato was closing the first IPO by an Indian Unicorn with record subscriptions. Led by Vijay Shekhar Sharma, Paytm, which is registered as One97 Communications, is planning the largest IPO by an Indian company till now. 

Reports suggest the company is targeting a valuation of $24-30 billion for the issue, up from its private market valuation of $16 billion in November 2019 when it announced its last major fundraise. That is close to a 50% bump-up, and it might be taking a cue from Zomato, which also saw its valuation go from $5.5 billion in a private round in January to $8.6 billion.

But while Zomato operates in a duopoly market, with its main competitor being Swiggy, Paytm has at least a dozen major well-funded competitors. These include Google Pay, Walmart-owned PhonePe, Amazon Pay, and WhatsApp Pay, besides market leaders in various financial services. 

Paytm's numbers are astounding. It has 333 million registered users, over 114 million annual transacting users, and 21 million merchants on the platform. This makes it the largest ecommerce platform in the country in terms of spread. The company has spent money aggressively over the years to build its brand and acquire customers, but how big a business it will be able to build on top of this has always remained a question. 

The CapTable sifted through Paytm’s DRHP to bring you five factors to keep track of as the company starts its mega IPO process.

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