Paytm Goes Public as Indian Unicorns Draw Huge Investor Interest

Paytm followed in Zomato’s footsteps, announcing plans to go public in Mumbai. The IPO is

anticipated to become India’s largest tech stock launch to date, bringing the country’s digital

unicorns in the spotlight once again and raising expectations.

Paytm Expects to Raise Billions in Public Financing

Paytm, one of India’s leading digital payments providers, was recently reported to have filed a

draft prospect for an Initial Public Offering (IPO) with the Securities and Exchange Board in

Mumbai. Planning to draw in up to Rs 166 billion (~$2.2 billion), Paytm has joined Zomato which also began raising public financing earlier in July.

While the food delivery company is aiming to sell shares worth $1.3 billion, Paytm is expected to successfully become the largest listed tech firm in India, bringing its total valuation to around $25 billion, according to industry analysts.

Zomato also has a more limited business scope, even though it is important in people’s daily

habits. Paytm, on the other hand, is one of the most common casino payment methods for media, entertainment and online casino in India, among others. Currently, more than 114 million desi consumers use its payment services on a regular basis.

Paytm has some important institutional investors at this stage, including Ant Group (Alibaba

affiliate), Softbank and Berkshire Hathaway. Already one of the Union’s largest tech startups, the payment provider is likely to almost double its valuation from last year’s private fundraisings.

India’s New Generation Economy Is All Digital

Paytm has gone a long way. The brand was launched in 2010 as a service for buying prepaid

mobile phone plans and paying certain bills online. Its landmark mobile wallet saw RBI’s green

light in 2012, becoming the core of its business operations. A couple of years down the line,

Paytm began establishing important partnerships, becoming a preferred online payment

provider for Uber and Indian Railways.

And its recent success is not surprising. The growth of online payments reflects the importance

and size of the online market in India. After large cash payments were ruled out by the Centre in

2016, the average desi consumer had to make some changes in a country with mostly cash

transactions up to that point.

Mass smartphone adoption only facilitated the rise of Paytm’s mobile payments app. India’s e-

commerce market alone is predicted to soon surpass $100 billion, stimulated further by the

pandemic-related digital transition.

Online retail is still estimated to be a fraction of total retail across Bharat. Yet, the Government

has indicated in the past – in its Digital India initiative – that eliminating the grey economy and

cash transactions should bring the digital economy to over a trillion dollars by 2025.

Tech Unicorns Lead the Way

When Zomato revealed its IPO plans, industry experts announced that shares made available

were already the largest tech offer on Indian stock markets. Tata Consultancy Services previously topped the list with a $1.17 billion IPO way back in 2004.

Zomato’s total valuation is now almost $8 billion. But it is merely one of hundreds of Indian tech

unicorns that are growing and attracting investor interest, despite some concerns with long-term business performance. None of those worth $1 billion or more had previously gone public.

Flipkart was already bought for more than a billion dollars but was directly acquired by

institutional investors like Walmart, Softbank affiliates, Canada pension funds and GIC. Despite

the fact that the e-commerce company raised additional $3.6 billion in its latest funding round, it

is also reportedly looking at an IPO. Current estimates place its total value at almost $38 billion.