Paytm to issue fresh equity shares worth Rs 12,000 crore ahead of IPO

Vijay Shekhar Sharma-led One97 Communication Ltd, which is the parent company that owns Paytm, has decided to issue fresh equity shares worth Rs 12,000 crore as part of its primary fundraising. As per the proposal, Paytm founder Sharma may also get declassified as 'promoter' of the company in accordance with the Securities and Exchange Board of India (Sebi)'s public listing rules. The company's extraordinary meeting that'll be held on July 12 will take the decision on declassifying Sharma from the said status. The fundraising announcement comes ahead of Paytm's much-awaited initial public offering (IPO) in November.

"The company proposes to create, offer, issue and allot fresh equity shares of the face value of Rs 1 each of the company (the "equity shares") up to an aggregate of Rs 12,000 crore [...] The proposed offering is likely to include a fresh issue of the equity shares by the company and an offer for sale by certain, existing shareholders of the company," a Paytm statement said. The offers have already been approved in the June 14 meeting.

Also read: Paytm board gives in-principle approval for Rs 22,000 crore IPO

Paytm has roped in some of the most influential investment bankers for its proposed initial public offering (IPO). JP Morgan, Morgan Stanley, Goldman Sachs and ICICI Securities are likely to lead the issue, touted to be the largest IPO in the financial sector. The fintech giant is also looking to file its draft red herring prospectus in July. Paytm had made its IPO plans official after reaching out to employees and giving them a chance to tender their shares under the forthcoming issue as part of an offer for sale shares.

Also read: Paytm IPO: JP Morgan, Morgan Stanley, Goldman Sachs likely onboard

Some of Paytm's shareholders include Alibaba's Ant Group (29.71 per cent), Softbank Vision Fund (19.63 per cent), and Saif Partners (18.56 per cent). Vijay Shekhar Sharma holds a 14.67 per cent stake in the company. AGH Holding, T Rowe Price and Discovery Capital, Berkshire Hathaway also hold stakes in the company. Led by founder and chief executive officer Vijay Shekhar Sharma, Paytm has been raising revenue and monetising its services over the past year. The company has expanded beyond digital payments into banking, credit cards, financial services, wealth management and digital wallets.

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Also read: Vijay Shekhar Sharma's Paytm eyes India's largest IPO debut in November