Paytm IPO highlights Chinese, Indian regulatory attitudes after Ant fiasco

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Euromoney, June 21 2021

Paytm, whose largest shareholder is Ant Group/Alibaba, could raise India’s largest-ever IPO. It should be smoother than Ant’s own failed attempt, and that tells us something about changing regulatory positions.

On July 12, Indian digital payments company Paytm will seek shareholder permission for what could be India’s largest-ever IPO.

Its progress will draw interesting comparisons with the fate of its Chinese equivalent – and notable shareholder – Ant Group.

According to a notice calling an extraordinary shareholder meeting in Delhi, Paytm will sell 120 billion rupees ($1.6 billion)-worth of new shares.

That is understood to be part of a combined primary and secondary share sale that will raise the equivalent of around $3 billion, with JPMorgan, Morgan Stanley, Goldman Sachs and ICICI Securities as joint bookrunners.

If it does so, it will overtake the Coal India IPO as India’s biggest-ever listing. Paytm could be valued at close to $30 billion.

As Euromoney explained in our landmark feature on the company in 2017, Paytm started life as a prepaid mobile recharge website in 2010 before taking advantage of prime minister Narendra Modi’s controversial demonetization programme and pivoting to become the largest mobile payment service platform in India.

Along the way it attracted the attention of Ant and its parent Alibaba, in a partnership that was about a lot more than money: Ant used Paytm as one of the largest-scale examples of its strategy to buy minority stakes in businesses in other countries that resemble it, introducing Ant’s tech into the back-end while riding upon the local partner’s licences, cultural knowledge and reach.

Paytm has since assembled quite the roster of other shareholders, SoftBank and Berkshire Hathaway among them, but it is the Ant position that catches the eye, since the Paytm IPO will follow Ant’s aborted attempt at its own listing.

Even some of the bookrunners are the same: JPMorgan and Morgan Stanley were leads on the Ant deal – alongside Citi, which is in the syndicate on Paytm – and Goldman appeared at a lower rung in the syndicate.

Over the years, the relative regulatory positions of China and India towards their fintechs have shifted.

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Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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