On Monday, Paytm, India’s most valuable startup informed its shareholders and employees that it plans to prepare for an initial public offering.
Paytm said in a letter to shareholders and executives that it wants to raise money through the IPO by issuing new stock and selling existing shareholders’ shares. Executives and employees at the startup will have the option to sell their shares in the company.
This is the first time the Noida-based startup has spoken publicly about its IPO plans. The board of directors has given the startup in principle authority to pursue the public market, according to the letter.
Paytm, which is funded by Alibaba and SoftBank, hasn’t said when it wants to apply for an IPO, but it has asked shareholders to respond by the end of the month if they want to sell their shares.
Paytm wants to raise roughly $3 billion in the IPO, according to two persons familiar with the situation, and is aiming for a valuation of up to $30 billion. Paytm did not comment on the matter.
Paytm isn’t the first startup to consider taking the public approach. Long before Paytm became the leading mobile wallet service and developed into a variety of banking and commerce services, the startup filed with the regulator with the objective of going public. At the time, the company shelved its IPO plans in favour of raising funds from venture capitalists to explore fresh growth opportunities.
A lot is depending on Paytm’s successful IPO – the startup reported a consolidated loss of $233.6 million for the financial year ending in March, down from $404 million the previous year. India’s stock markets still need to be tested completely for the equities of technological startups in India, however, there have been promising indicators from ordinary investors over recent years.
Revenues from the startup declined to $437.6 million by 10% over this period.