One 97 Communications Pvt., parent of online payments platform Paytm, has filed for an initial public offering to raise Rs 16,600 crore in what will be India’s biggest maiden offer.
According to the prospectus, Rs 4,300 crore worth of proceeds are expected to be used for growing customer base, acquiring more merchants and providing them with more financial services.
Rs 2,000 crore is estimated to be used for new business initiatives, acquisitions and strategic partnerships.
Paytm, however, did not provide estimates for how much it will spend for general corporate purposes. The amount for general corporate purposes, it said, will be finalised upon determination of the offer price and updated in the prospectus prior to filing with the Registrar of Companies. The amount utilised for general corporate purposes shall not exceed 25% of the net proceeds, it said.
Financials Of One97 Communications
One97 Communications reported a net loss of Rs 1,701 crore in the year ended March 31, lower than Rs 2,942 crore net loss reported a year before. Its net worth fell to Rs 6,535 crore in the last financial year, down 19.4% year-on-year.
Total borrowings rose to Rs 545 crore in FY21, up from Rs 209 crore in FY20.
"We expect to continue to incur net losses for the foreseeable future and we may not achieve or maintain profitability in the future," the prospectus said.
We cannot assure you that we will ever achieve or sustain profitability and may continue to incur significant losses going forward. Any failure by us to achieve or sustain profitability on a consistent basis could cause the value of our equity shares to decline.One97 Communications DRHP
The company expects its operating expenses to increase as it hires additional personnel, expand its operations and infrastructure, both domestically and internationally. The expenses will also rise as it continues to enhance platforms and develop and expand its capabilities, expand the company's products and services, and expand and improve interface, it said in the prospectus.
The net result of these activities is that the company continues to register negative cash flows.
Expanse Of The Business
One97 Communications continues to have the widest spread of business across India's payment ecosystem.
It offers payment services, commerce and cloud services, and financial services to 33.3 crore consumers.
It has a total merchant base of 2.1 crore.
It reported a gross merchandise value of Rs 4.33 lakh crore in FY 2021 across platforms.
Monthly transacting users (MTU) stood at an average of 5.04 crore.
Payments and financial services continue to account for the largest share of revenue.
We derive a majority of our revenue from transaction fees we collect from merchants for our payment services. In FY 2019, FY 2020 and FY 2021, revenue from our payment and financial services accounted for 52.5%, 58.1% and 75.3% of our revenue from operations.One97 Communications DRHP
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