That decision is based on Paytm’s desire to streamline the IPO process and go directly to the market, the report says. If Paytm skips its pre-IPO fundraising, it won’t be related to valuation discrepancies.
Paytm, which has a multi-stack payment architecture, will seek a valuation in the range of $20 billion to $22 billion, one source said. Its most recent valuation put the company at $16 billion. The company’s draft red herring prospectus (DRHP) says it “may consider” a Pre-IPO placement.
“Pre-IPO is always just an option for companies heading for a market debut, and it’s not exercised by most companies. It makes sense to put the Pre-IPO option in the DRHP, as otherwise the company cannot raise any primary capital,” one source told India.com. “Companies end up not taking up the Pre-IPO option as it only delays the process.”
Paytm — which provides payment, cloud, eCommerce and financial services to more than 333 million customers and 21 million businesses — could soon get the blessing of the Securities and Exchange Board of India (SEBI) for its IPO.
Related: Paytm, HDFC Bank Partner To Provide Consumer, Merchant Solutions
In August, Paytm and private Indian bank HDFC Bank announced a strategic partnership on financial solutions for Indian customers and merchants that will “accelerate digital transformation in semi-urban and rural India.”
HDFC has more than 50 million debit and credit card customers and 2 million merchant acceptance points.
The deal with India’s largest private bank will include the launch of new products in the digital payments, lending and point-of-sale (POS) solutions spheres. HDFC Bank will be the payment partner, and Paytm will be the distribution and software partner for a new payment gateway and POS solutions.
Paytm and HDFC Bank also plan to launch a co-branded retail POS product.
