The country's biggest IPO is about to come. Paytm submitted the draft to SEBI on Friday for this. The company will raise Rs 16,600 crore. Earlier, 15,200 crores were raised by Coal India in 2010. We are telling about the investment in Paytm's IPO, how is the company and what are the allegations on it.
However, the tag of the biggest IPO is not going to last very long. In this year, the country's largest insurance company LIC is coming with an IPO, which will be a record till now. That is, LIC is going to raise 90 thousand crores which will be difficult to break for years.
All this information has been given in the draft which has been submitted to SEBI. According to this, the company will raise 8,300 crores from new shares. The remaining 8,300 crores will be sold under the offer for sale. In this, China's Ant Group will sell its shares. Ant Group holds a 30% stake in the company. The company is planning to raise Rs 2,000 crore before the IPO.
The company's IPO will open after getting the approval of SEBI and its price will be decided at the same time. It is expected to arrive during Diwali.
The valuation of the company after the IPO will be estimated between Rs 1.80 lakh crore and Rs 2.20 lakh crore. At present, its valuation is close to Rs 1.18 lakh crore. It is the second-highest valuation Indian startup.
The company has been consistently making losses. It has said in the draft that it cannot guarantee that it will make profits going forward. That is, it can give losses even further. It has been a net loss for the last three years. There has been a loss of Rs 2,943 crore in FY 2020 and Rs 1,704 crore in 2021.
Retail will have only a 10% stake in this IPO. The share will be 75% for Qualified Institutional Buyers (QIBs) and 15% for High Net Worth Individuals (HNIs). Anchor investors may have 60% of the QIBs.
It has been said that at present its control is in the hands of the foreign company. It will continue to be in their hands even in the future because it is so under FDI rules.
Ratan Tata has 75,000 shares in Paytm. He has taken this share through RNT Associates. They will sell some of this stake. Warren Buffett also has 1.7 crore shares. They will also sell their shares through it. He has acquired these shares through Hathway Holding.
Ant Group holds 30.33%, Japan's Soft Bank 18.73%, Elevation Capital 17.65%, Alibaba 7.32%, Vijay Shekhar Sharma 14.97% and others 11%.
Paytm has said that there have been several violations in the uploading of KYC (Know Your Customer) data of customers on Paytm Money and providing investment advice. SEBI has made such an observation. SEBI has given a written warning to the company. SEBI had issued new guidelines regarding the advisory business, after which its advisory business was also suspended in March 2021.
The Reserve Bank has raised the question under the Foreign Exchange Management Act (FEMA). This process is still ongoing. The Reserve Bank issued the rules under the Financial Action Task Force (FATF) in June this year. It is used globally for money laundering and terrorist funding. Therefore, in the future, there may be a roadblock for investment through New Umbrella Entity (NUE).
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