Paytm IPO: Total subscription at 1.51 times on final bidding day, retail portion booked 2.13 times

The initial public offering of Paytm owner One97 Communications was subscribed 137 percent on November 10, 2021, the third day of bidding. The offer has received bids for 6.63 crore equity shares against the IPO size of 4.83 crore equity shares.

Retail investors subscribed 1.5 times to the IPO, and non-institutional subscribers put in bids for 17 percent against their reserved portion. Qualified institutional buyers subscribed 2 times their reserved portion.

The price band for the offer, which closes today at 5 pm is eyeing bids worth at least Rs 5,000 crore. While most bidding happens on the final day, the response has been very tepid from the investors. If it becomes successful, it will surpass the public issue of Coal India to become India's largest primary market offering.

The company plans to use proceeds from the issue to reinforce its ecosystem by acquiring and retaining more customers, fulfilling general corporate demands, and financing strategic collaborations like mergers and acquisitions.

"One97 Communications is a play on digitisation of various financial services, including payments, investments, and financial solutions," ICICI Direct said in a note. At the upper end of the price band, it is valued at 9.5 times the post-issue BV and at 24 percent of annualised GMV.

While brokerages believe Paytm is an expensive deal, it is well-positioned to benefit from the exponential five times growth expected in mobile payments between FY21 to 26, which justifies the higher valuations, Angle One said.