1 min read.Updated: 06 Sep 2019, 10:15 PM ISTKristie Neo
HT-Mint Asia Leadership Summit: I’m looking to make free cash, and then I’ll go (for an IPO). When I’m comfortable issuing bonds that I can sell in five years, then I’ll go (for listing)
'This is the age in time when we are able to build young firms, create massive amount of value for company shareholders'
Paytm will start preparations for an initial public offering (IPO) in the next 22-24 months, its founder and chief executive officer (CEO) Vijay Shekhar Sharma told the HT-MintAsia Leadership Summit in Singapore on Friday.
The Indian e-commerce and digital payments giant had last raised funds, totalling $300 million according to regulatory filings, from Warren Buffet’s Berkshire Hathaway in 2018. Its valuation has skyrocketed to $15 billion, Vijay Shekhar Sharma recently said in an interview.
Paytm’s parent, One97 Communications Ltd, is India’s most valuable unicorn, or privately held startup with a valuation of $1 billion or more. Its backers include Masayoshi Son’s SoftBank Vision Fund and Alibaba Group’s Ant Financial.
Sharma said that while a public listing was ‘inevitable’, it was yet to construct a road map for it, because he wants the firm to generate more cash before entering the public market.
“I’d prefer to see 5% reduction in margins right now, maybe 10% incremental, so maybe two years. I’m talking free cash, not profitability. I make money, but I’m looking to make free cash, and then I’ll go (for listing). When I’m comfortable issuing bonds that I can sell in five years, then I’ll go (for listing)."
He added that India is going through a “golden age of entrepreneurship" and considers himself “lucky" to be in a period where small founders get to build big businesses. “We’ve seen large businesses in the country. But this is the age in time when we are able to build young companies, create massive amount of value for company shareholders, and produce great solutions to problems in India," said Sharma.
India’s venture capital and startup ecosystem has grown significantly, drawing the attention of both local and foreign investors in the recent years.
According to Venture Intelligence, Indian startups raised a record $3.9 billion from VCs in the first half of 2019. The figure surpasses the full year figure for 2016 and 2017, indicating a surge in investor confidence, buoyed by post-election optimism and Flipkart’s $16-billion sale to Walmart last year.