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Paytm, the Indian digital payments pioneer backed by Jack Ma’s Ant Group Co., is considering scrapping the proposed 20 billion rupees ($268 million) share sale ahead of its initial public offering over valuation differences, according to people familiar with the development.

The firm had been seeking a valuation of above $20 billion based on initial investor feedback, while advisers on the deal recommended a lower pricing, some of the people said, asking not to be named as the information is private. The company was last valued at $16 billion, according to unicorn tracker CB Insights.

Formally called One97 Communications Ltd., Paytm hopes to tap into strong investor demand fueled by easy liquidity that has buoyed India’s blockbuster listings this year. The company had reported a 10% drop in revenue during the year ended March 2021, after intensifying competition from Walmart Inc.’s Flipkart and Amazon.com Inc. cut its e-commerce and cloud sales by the same amount.

Pre-IPO sales are a routine feature in IPO prospectuses as companies seek to retain flexibility on raising funds, and it isn’t unusual for a firm to skip the step if it risks delaying the listing. Valuation concerns weren’t the driving factor in Paytm’s decision, according to one person familiar with the development.

A final decision hasn’t been made and Paytm could still consider a pre-IPO sale potentially at a lower valuation, the people said. Regulators are expected to approve the listing in coming days, some of the people said.

Representatives for the company didn’t respond to an email seeking comment.

Banks including Morgan Stanley, Goldman Sachs Group Inc., Citigroup Inc. and ICICI Securities Ltd. are running the share sale. Paytm may consider a pre-IPO placement of as much as 20 billion rupees, it had said in the Draft Red Herring Prospectus filed with the Securities and Exchange Board of India on July 16.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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