As Paytm Lists, Over 350 Employees Set To Become Millionaires
A Paytm lifer who now heads its payments bank, the company's president and group CFO, a former head of Goldman Sachs in Asia and a ex-employee of WhatsApp are among those who will see their wealth grow as One97 Communications Ltd. lists on the exchanges on Thursday.
One97 Communications, commonly referred to as Paytm, raised Rs 18,300 crore or about $2.5 billion in an offering which valued the company at slightly over $20 billion.
Unlike other recent tech listings though, Paytm's valuation has not seen an exponential increase compared to its last fundraising. The company was valued at $16 billion in 2019, when it last raised $1 billion.
Still, founder Vijay Shekhar Sharma and top employees will see their wealth grow.
According to disclosures made in the red herring prospectus issued by One97 Communications, Sharma's shareholding will be worth Rs 17,317 crore or $2.3 billion at the upper end of the price band of Rs 2,150 per share. Sharma had become a billionaire in 2017, when the company was valued at $10 billion.
Madhur Deora, president and group chief financial officer of Paytm, will see his shares valued at Rs 282 crore ($376 million). This makes Deora the second-largest beneficiary of Paytm's listing, after Sharma.
Harinderpal Singh Takhar, chief executive officer at Paytm Labs, is the third-biggest gainer with his shares valued at Rs 273 crore ($364 million). Paytm Labs is the research and development division of Paytm.
Vikas Garg, the company's chief financial officer, will see the value of his shares and employee stock options at close to Rs 150 crore.
Renu Satti, who started out in the human resources department of Paytm and held a number of roles in the company over the years, will see the value of her shares at Rs 84 crore.
Mark Schwartz, a former chairman of Goldman Sachs Asia, and Neeraj Arora, a former WhatsApp executive, who are both on the board of One97 Communications, will also see their wealth rise.
Overall, at least 350 current and former employees are likely to see their personal wealth rise above the million dollar mark, a person in the know said on condition of anonymity. Reuters had first reported that 350 people will become millionaires by the time the Paytm stock lists.
Paytm's three-day IPO was oversubscribed by the time it closed. Investors, including BlackRock, Canada Pension Plan Investment Board, GIC, ADIA, APG, City of New York, Texas Teachers Retirement, NPS Japan, participated in the issue.
Paytm shares have been traded in the unlisted market for years now, according to Manan Doshi of UnlistedArena.com.
"In May, before the company announced its IPO plans, the shares were traded at around Rs 900-1,000 per share. But as soon as the prospectus was released and the media noted that the company could be valued at $25-30 billion, the shares jumped in valuation," Doshi said.
According to Doshi, ahead of the IPO, Paytm's unlisted shares were being traded at Rs 2,300-2,600 per share.
Ahead of the listing, in the grey market, Paytm shares are currently trading at a Rs 30 discount to the IPO price, indicating a lower listing price, a person in the know said on the condition of anonymity.
Paytm continues to remain a loss-making entity, even after 13 years of operations.
One97 reported a consolidated loss of Rs 1,701 crore in FY21 compared with Rs 2,942 crore in FY20. In the first quarter of FY22, revenue from operations rose 62% year-on-year, the company said in its prospectus. The consolidated loss for the three months ended June stood at Rs 381.9 crore.
As the company looks to chart its next phase of growth, it's focusing on merchant acquisition and providing credit to these merchants. In an interview with BloombergQuint last month, Sharma had highlighted that aggressive competition will not affect Paytm's merchant acquisition plans.
"Deep pockets help more on the consumer side rather than on the merchant side. To reach a merchant, you have to jump through a lot of hoops," Sharma had said. "This isn't hard work, it's magic work."