Paytm, a leading digital payments company in India is awaiting regulatory approval to raise 166 billion rupees ($2.23 billion USD) on one of the country’s largest stock exchanges via an IPO. The company is supported by Ant Group and Softbank, among others.
The valuation of the company could be as high as $25 billion. Given India’s rapidly growing digital economy the IPO may attract numerous global investors.
The company is in an increasingly fierce battle for market share with Alphabet Inc’s Google Pay and WhatsApp Pay, which is owned by Facebook Inc.
According to Ajit Mishra, vice president of research at Tonare Broking in Noida, the growing number of internet users and the wide reach of young people have created favorable conditions for the development of digital space companies.
If Paytm is successful in its IPO, there may be a rush by Indian fintech companies that are looking for a way to cash-in on the interest.
In 2016, India enacted a ban on high value banknotes, which led to the rapid rise of digital payment technology. Meanwhile, businessman Vijay Shekhar Sharma founded the company Paytm and became successful virtually overnight.
Without the ability to use cash for numerous transactions, digital payment platforms were driven into the spotlight.
Paytm also went into services like insurance, selling gold, and other smaller markets like movie and flight. It also makes bank deposits and money transfers easy. With the influx of capital from a successful IPO, the company may look to grow via acquisitions.
Other Indian startups have received increasing interest from foreign fund investors, and have begun planning to list their shares to the public.
On Friday, Indian food delivery startup Zomato opened a $1.3 billion stock offering, backed by Ant Group that was oversubscribed by nearly eight times.
If Paytm explodes onto the Indian public markets with a blistering IPO, it may be the start of something big in Indian fintech.