Noida-based digital payments giant PayTM will start preparations for an initial public offering (IPO) in the next 22-24 months, its founder and chief executive officer (CEO) Vijay Shekhar Sharma stated at the HT-MintAsia Leadership Summit in Singapore on Friday last week. As per Sharma, he wants the firm to generate more cash before it finally goes public.
Founded in 2010, PayTM is one of the first digital payment platforms in India. Besides individual transactions, merchant payments and PoS systems, it has ventured into financial products such as a payments bank and credit cards, apart from an e-commerce offering (PayTM Mall) and is also touted to enter the educational services segment in the near future. Additionally, the fintech startup had recorded gross transaction value(GTV) of over $50 billion in FY19.
I’d prefer to see 5% reduction in margins right now, maybe 10% incremental, so maybe two years. I’m talking free cash, not profitability. I make money, but I’m looking to make free cash, and then I’ll go (for listing). When I’m comfortable issuing bonds that I can sell in five years, then I’ll go (for listing),” said Sharma.
Paytm’s parent, One97 Communications Ltd, is India’s most valuable unicorn, or privately held startup with a valuation of $1 billion or more. Its backers include Masayoshi Son’s SoftBank Vision Fund and Alibaba Group’s Ant Financial.
The Indian e-commerce and digital payments giant had last raised funds, totalling $300 million according to regulatory filings, from Warren Buffet’s Berkshire Hathaway in 2018. Its valuation has now skyrocketed to $15 billion.
As per Vijay Shekhar Sharma, India is going through a “golden age of entrepreneurship” and the PayTM CEO considers himself “lucky” to be in a period where small founders are provided an opportunity to build big businesses.
This is the age in time when we are able to build young companies, create massive amount of value for company shareholders, and produce great solutions to problems in India.
India’s venture capital and startup ecosystem has grown significantly, drawing the attention of both local and foreign investors in the recent years.
According to Venture Intelligence, Indian startups have so far raised a record $3.9 billion from VCs in first half of 2019. The figure surpasses the entire year’s numbers for 2016 and 2017, indicating a surge in investor confidence, buoyed by post-election optimism and Flipkart’s $16-billion sale to Walmart last year.Talking of startups floating an IPO, Quikr announced its plans to go public by 2021, on Friday last week (September 6).