India’s Paytm prices its stocks at $28.9 each at its $2.5bn IPO

By Amirtha P S, Desk Reporter
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Ant Group-backed India’s leading digital payments provider, Paytm has priced its shares at the top of the range for its $2.5 billion initial public offerings (IPO), even though India’s largest public issue was received with less enthusiasm than those of other tech firms.

Paytm, a payments company that markets an all-in-one app, priced its 85.1 million-share issue at $28.9 each. It had flagged a price range of $27.95-$28.9 per share for the deal.

“It was expected that Paytm would price the deal at the top-end as the company’s anchor-allotment was oversubscribed by more than 10-times,” said Ms.Shifara Samsudeen, Equity Analyst at LightStream Research, who publishes on research platform Smartkarma.

The company, formally known as One97 Communications, which had already raised $1.1 billion from anchor investors, has received $2.64 billion worth of bids for the remaining 48.4 million shares on offer, or 1.89 times, according to stock exchange data.

Paytm, which offers a range of services from banking, shopping, movie and travel ticketing to gaming, is expected to make its debut on Indian bourses on November 18, the company said in its prospectus.

The digital payment provider is backed by big investors like Ant Group and SoftBank’s Vision Fund and its anchor investors included big names like BlackRock and Canada Pension Plan Investment Board.

“Qualified institutional buyers that have bought into the company know what they are investing in, they will not create panic on day one. They are not looking for one-day gains,” said Mr. Arun Kejriwal, founder of an independent research firm.

Ant Group, which had a 28 percent holding in Paytm, is slashing its shares into 23 percent. SoftBank’s Vision Fund is cutting its stake by 2.5 percentage points to 16 percent.

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