Mumbai-based B2B payments and services provider PayMate has filed its draft red herring prospectus (DRHP) to raise funds via an initial public offering (IPO) with the capital markets regulator Securities and Exchange Board of India (SEBI). The IPO comprises of a fresh issue of Rs 1,125 crore and an offer for sale (OFS) worth Rs 375 crore.
Face value of the issue stands at Re 1 per equity share for the proposed sale. 75 per cent of the offer shall be reserved for qualified institutional buyers, not more than 15 per cent will be reserved for non-institutional bidders and the remaining 10 per cent shall be available for retail investors.
The company is also mulling a private placement of equity shares worth Rs 225 crore. If materialized, this could lead to the reduction of issue size. Proceeds from fresh issue worth Rs 77 crore will be utilised for investment in expansion of business in new geographies, as per the press release.
While Rs 228 crore will be used for pursuing inorganic initiatives, Rs 688.70 crore will be used for placing cash as collateral with its financial institution partners to improve margins and general corporate purchases.
On the date of the DRHP filing, the promoter and promoter group held 66.70 per cent stake in the company whereas the rest was held by public shareholders.
The OFS comprises by promoter shareholders-- Rs 134.73 crore by Ajay Adiseshan and Rs 3.29 crore by Vishvanathan Subramanian. It also includes investments from investor selling shareholders such as up to Rs 127.38 crore by Lightbox Ventures, up to Rs 15.66 crore by Mayfield FVCI Ltd.
The offer for sale is also made up of investments by other selling shareholders -- up to Rs 1.96 crore by G Adiseshan, up to Rs 11.45 crore by Uma Vishvanathan, up to Rs 15.37 crore by Dhruv Pratap Singh, up to Rs 26.56 crore by Probir Kumar Roy, up to Rs 13.27 crore by Alexander Kuruvilla and up to Rs 5.59 crore by Anand Rajaram.
Book running lead managers for this IPO are ICICI Securities Limited, HSBC Securities and Capital Markets (India) Pvt Ltd, JM Financial Limited and SBI Capital Markets Limited whereas Link Intime India Pvt Ltd is the registrar to the offer. Shares are proposed to be listed on the BSE and the NSE after the issue.
The DRHP submitted to the SEBI also warned investors to consult their tax, legal and financial advisors prior to investing in the issue. It also stated that the company cannot assure any help in case a group of customers choose to terminate their agreements due to any reason including lower rates offered by competitors.
It reads, “In making an investment decision, you must rely on your own examination of us and the terms of the Offer, including the merits and risks involved, and you should consult your tax, financial and legal advisors about the particular consequences of investing in the offer.”