Later this year, Paytm IPO (Initial Public Offering) can be started for the fresh shares of its parent company One97 Communications to raise about $1.6 billion or ₹12,000 crores.
In a note to its shareholders, Paytm also mentioned that its founder Vijay Shekhar Sharma will no longer be recognised as the promoter of the company.
Next month on 12 July, One97 Communications is going to have its extraordinary general meeting (EGM). Still, there is confusion about, ‘if the shares will be sold by the existing shareholders in Paytm IPO or not?’.
Mr Sharma took this decision of stepping down the position of promoter due to the rules by the Securities and Exchange Board of India (Sebi), which is the capital markets regulator of India and wrote about.
This step of Paytm makes the local listings recognise it as a ‘Professionally Managed’ company, instead of a company, where the founder with its special rights solely controls the company.
Now, Vijay Shekhar Sharma will be just like other shareholders of the company after relinquishing his special powers as a promoter.
Even, the company can also be expected to start a fundraising round before Paytm IPO. In this pre-IPO placement, equity shares will be issued and the offering size will be reduced to the same extent.
According to Paytm, currently, the founder of the company holds 14.61%% of the total paid equity shares which equals 9,051,624 equity shares. Now, he will influence the decision-making process of the company based on the shares held by him as a shareholder.
Currently, 38% of the stake of One97 Communications are owned by the Alibaba and Ant Group of China, while Elevation Capital holds 17.65% stake and SoftBank owns 18.73% stake.
Paytm’s EGM will include five agendas to discuss on. Two of them are about the employee stock options and the new Articles of Association (AoA).
Next month, Paytm can submit its draft red herring prospectus (DRHP) to SEBI, so that it can go public and start Paytm IPO by November.