REPORT ON

“The Initial public offering”

Group members: -
Name Roll no. Examination roll no.
Ratna Kumari (220667)- 22024503131
Sampurna (220675)- 22024503010
Shrishti (220688)- 22024503108
Ritika Kem (220672)- 22024503126
Rishika (220671)- 22024503021
 Paytm
Paytm is a digital wallet and e-commerce company based in India. It
was founded in 2010 by Vijay Shekhar Sharma and has since
become one of the most popular mobile platforms in the country.
Paytm offers a wide range of services, including mobile recharges, bill
payment, ticket bookings, and online shopping. It also has a feature
called Paytm wallet, which allows users to store money in their digital
wallets and use it for various transactions.
One of the key features of Paytm is its ease of use. The platform is user
friendly and can be accessed through its website or mobile app. Users
can easily add money to their Paytm wallets using debit card, credit
card, net banking, or UPI (unified payment interface). Once that
money is added, users can use it for various transactions without
having to enter their card details every time.
Paytm has also partnered with various providers to offer discount and
cashback offers to its users. This has helped the platform gain
popularity among consumers who are always looking for ways to save
money. In addition to its digital wallet and e-commerce services,
Paytm has also ventured into other areas such as insurance, mutual
funds, and gold investment. It has also launched Paytm payment
bank, which offers saving account and other banking services to its
customers.

INITIAL PUBLIC OFFER

An initial public offering or stock launch is a public offering in which
shares of a company are sold to institutional investors and usually also
to retail investors. An IPO is typically underwritten by one or more
investment banks, who also arrange for the shares to be listed on one
or more stock exchange.

GENERAL PROCEDURES FOR AN IPO: -

1. Selection of underwriters: - The company looking to go
underwrite the IPO.
2. Preparation of registration statement: - The company prepares a
registration statement with the security and exchange
commission (SEC) that includes information about the
company’s financials, operation, and risk.
3. Roadshow: -The underwriters and company management team
go on a roadshow to pitch the IPO to potential investors.
4. Pricing: - The underwriters and company management team
determine the price range for the IPO based on investor demand.
5. Allocation: - The underwriters allocate shares to institutional
investors and retail investors.
Listing: - The shares are listed on a stock exchange and begin
trading publicly. .

OBJECTS OF ISSUE
The net proceed from the IPO will be utilized towards the following
purposes;

• Growing and strengthening Paytm ecosystem, including through

acquisition and retention of consumers and merchants and
providing them with greater access to technology and financial
services - ₹ 4,300 Crores.
• Investing in new business initiatives, acquisitions and strategic
partnerships - ₹ 2,000 Crores.
• General corporate purposes.
IPO DETAILS
IPO Date Nov 8, 2021 to Nov 10, 2021

Listing Date Nov 18, 2021

Face Value ₹1 per share

Price ₹2080 to ₹2150 per share

Lot Size 6 Shares

Shares
Total Issue Size
(aggregating up to ₹18,300.00 Cr)

Shares
Fresh Issue
(aggregating up to ₹8,300.00 Cr)

Shares of ₹1
Offer for Sale
(aggregating up to ₹10,000.00 Cr)

Issue Type Book Built Issue IPO

Listing At BSE, NSE

TENTATIVE TIMETABLE

Event Tentative Date

Opening Date Nov 8, 2021

Closing Date Nov 10, 2021

Basis of Allotment Nov 15, 2021

Initiation of Refunds Nov 16, 2021

Credit of Shares to Demat Nov 17, 2021

Listing Date Nov 18, 2021

IPO RESERVATION

QIB Shares Offered 26,394,231 (54.55%)

NII (HNI) Shares Offered 13,197,115 (27.27%)

 Retail Shares Offered 8,798,076 (18.18%)

Total Shares Offered 48,389,422

Paytm IPO Lot Size

The Paytm IPO lot size is 6 shares.

Application Lots Shares Amount

Retail (Min) 1 6 ₹12,900

Retail (Max) 15 90 ₹193,500

IMPORTANT DATES
1. November 8, 2021
On November 8, Paytm filed its draft red herring Prospectus
(DRHP) with the Securities and Exchange Board of India (SEBI)
for an initial public offering of ₹16,600 crore.

As per the DRHP, the company issued fresh shares worth ₹8,300
crore with a face value of ₹1 each, and the existing shareholders,
including the Founder and CEO Vijay Shekhar Sharma, Ant
financial (Netherlands) Holdings, Alibaba.com Singapore e-
commerce pvt. ltd, Elevation Capital, Saif
Partners India and BH International Holdings, offload their
stake worth ₹8,300 crore.

2. November 12, 2021

SEBI approved PAYTM’s DRHP, paving the way for the
company’s IPO, when a new violent movement of new-age
internet firms have either listed on the stock exchanges or not
have initiated proceedings to do so.

3. November 15, 2021

On 15th of Nov, allotment of shares was done

4. November 16, 2021

On Refund date, Paytm refund the excess money which was
received
 5. November 18, 2021
PAYTM opened its IPO for Subscription

6. November 22, 2021

Paytm IPO closed subscription

7. December 6, 2021
Paytm’ shares were listed on the National Stock Exchange (NSE) and
the Bombay Stock Exchange (BSE), after country's largest IPO
successfully raised ₹18,300 crore. The issue was subscribed 1.89 times
overall. Paytm allocated shares worth ₹8,235 crore to more than 100
anchor investors, including the Government of Singapore. The IPO
was subscribed 1.66 times by retail investors and 2.79 times by QIBs.
But it saw only a muted response from HNIs, whose portion
received just 24 percent. .

Now the question arises why did the stock perform poorly?
1. At the time of its IPO, Paytm valuation was Rs.1.39 crores but the
company was making losses
2.According to market participants, an inflated valuation and large
float were mainly responsible
3. Also investors seem to lack faith as they questioned the company’s
lack of profits and lofty valuations
4. Macquarie Research noted that Paytm’s valuation was expensive-
26 times its estimated price to sales ratio for 2022-23, when the global
benchmark is 0.3-0.5 times
5. Also, stock analysts have pointed out that the valuation of the
company has traditionally been decided by foreign investors with a
higher risk appetite, Whereas Indian public markets decide based on
conventional profitability and earnings metrics
6. A large chunk of the money raised through the offering- around
Rs.10,000 cr. Went to existing investors who exited their stake partly
or entirely.
CONCLUSION
The object behind IPO of Paytm is. –
1. Paytm said it will use the IPO proceeds for growing and
strengthening
2. It will provide an exit route to existing shareholders who have
invested in Paytm
3. Investing Rs.4300 crore in strengthening the Paytm ecosystem
including through acquisition and retention of consumers and
merchants.
4. Investing 2000 crore in new business initiatives, acquisitions and
strategic partnerships.
5. And other general corporates.