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Home / Companies / Start-ups /  Paytm gets board approval for IPO

BENGALURU : One97 Communications Ltd, owner of digital payment app Paytm, on Monday invited shareholders to tender equity shares in part or in full for sale during its public listing slated to be held by November-end.

In a letter to its shareholders, the company said that it has received an in-principle approval from the board of directors to undertake an initial public offering (IPO).

The proposed IPO is contemplated to include fresh issue of equity shares by the company and an offer for sale of equity shares by existing shareholders, Paytm said.

“You may, in your sole discretion, participate in the offer by offering either all or a part of the equity shares held by you... in the offer for sale. We wish to inform you that the offer for sale component has to be finalized before filing the draft red herring prospectus (DRHP) with Sebi. However, the price band for the IPO will be determined at a later stage, either at the time of filing the red herring prospectus (RHP) or prior to the IPO opening for subscription," said the letter.

Mint has seen a copy of the letter sent to shareholders.

“In light of the above, your equity shares that are not sold in the offer for sale shall be locked in for a period of one year from the date of allotment of equity shares in the IPO, unless they are exempted shares. You will not be able to sell your equity shares during this ‘one year’ lock-in period," said Paytm in the letter.

Paytm also warned investors that offering shares does not guarantee that they will be sold through the offer, as it will depend on the investor response to the offer.

“Accordingly, any of the offered shares which remain unsold in the offer, will be returned to you and will be subject to the lock-in applicable under the Sebi ICDR Regulations," Paytm said.

Mint first reported last week that the company was looking to raise $1-1.5 billion as part of the primary share sale during its initial public offering (IPO) worth at least $3 billion.

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