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Vijay Shekhar Sharma-led Paytm receives shareholders' nod to raise Rs 12,000 crore

Vijay Shekhar Sharma-led Paytm receives shareholders' nod to raise Rs 12,000 crore

As per Sebi norms, EGM also decided on declassifying Vijay Shekhar Sharma as company promoter. He'll still hold positions of chairman, CEO and managing director

Paytm founder and CEO Vijay Shekhar Sharma/ Photo Source: Reuters Paytm founder and CEO Vijay Shekhar Sharma/ Photo Source: Reuters

Paytm's parent One97 Communications has received shareholders' nod to raise Rs 12,000 crore via a fresh issue of shares. The decision was taken during an extraordinary meeting of the company shareholders, paving way for one of India's largest-ever initial public offerings (IPO) in recent times.

The online voting on the resolution started on July 9 and closed at 5 pm on July 11.

Vijay Shekhar Sharma-led company will also raise some amount by allowing existing shareholders to sell their shares. Together with the funding raising programme, Paytm is eying raising Rs 16,600 crore.

Also read: Paytm president Amit Nayyar, 4 other senior executives resign ahead of IPO

The EGM also decided on declassifying Sharma as the company promoter, following the Sebi norms for the company promoters. However, he'll still hold the positions of chairman, CEO and managing director at the company. As per the rules, a promoter must own a requisite 20 per cent stake in a firm; Sharma currently owns 14.61 per cent of the company.

Paytm parent One97 Communications Ltd recently made changes to its board of directors. Douglas Lehman Feagin, senior vice president, Ant Group, joined the Paytm board by replacing Ant Group chairman and chief executive Jing Xiandong (Eric), who has resigned, Paytm's registrar of companies filing shows.

Ash Lilani, Saama Capital managing partner, also joined the Paytm board as an independent director. The RoC filing shows that both Alibaba's Michael Yuen Jen Yao and Berkshire Hathaway investment manager Todd Anthony Combs retired from the board on June 30 after two years.

Also read: Biggest IPO ever! Paytm could pip Coal India in largest market debut

Some of Paytm's shareholders are 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 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.

Also read: Paytm parent rejigs board ahead of IPO; Ant's Douglas Feagin replaces Xiandong

Paytm's revenue for FY21 stood at Rs 3,186 crore, which is a decline from Rs 3,540 crore in the previous year. In FY21, the company recorded a net loss of Rs 1,701 crore, while the total loss in FY22 was Rs 2,942 crore.

According to a Bernstein report published on May 27, Paytm revenue may double by the financial year 2023 to over Rs 7,000 crore, with the non-payments segment contributing around 33 per cent to the overall kitty.

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

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