Initial public offerings (IPOs) have long been a popular term on Wall Street and among investors. By selling shares of the Dutch East India Company to the general public, the Dutch are credited with launching the contemporary IPO. Since then, firms have utilised IPOs as a means of raising funds from the general public by issuing shares of stock to the general public. IPOs have experienced uptrends and downtrends in issuance over the years. Due to innovation and several other economic reasons, individual industries also undergo uptrends and downtrends in issuance. At the height of the dotcom boom, companies scrambled to list themselves on the stock market as technology IPOs surged. There are essentially two steps in the IPO process. The pre-marketing stage of the offering is the first, and the actual initial public offering is the second. A company that wants to go public will either request private bids from underwriters or make a public announcement to pique interest.
TopPaytm
India's top financial services provider, Paytm, provides customers, physical businesses, and internet platforms with full-stack financial solutions. The company wants to integrate half a billion Indians into the global economy through payments, commerce, financial services, banking, and investments. Vijay Shekhar Sharma launched One97 Communications Limited, which has the trademark Paytm and has its headquarters in Noida, Uttar Pradesh. Softbank, Ant Financial, AGH Holdings, SAIF Partners, Berkshire Hathaway, T Rowe Price, and Discovery Capital are among of its investors.
The country's largest digital bank, Paytm Payments Bank, is owned by Vijay Shekhar Sharma, founder, and CEO of Paytm, and One97 Communications Limited. It has over 58 million account holders. To fulfil its goal of integrating under- and un-served Indians into the formal banking system, it has developed creative technological solutions that have made banking convenient for people all over the nation.
Its wholly owned subsidiary, “Paytm Money,” has the distinction of becoming India's largest investment platform within its first year and is currently one of the largest contributors of new Systematic Investment Plans (SIPs) to the Mutual Funds industry. It has already received approvals to launch Stock Broking, Demat Services, and National Pension System (NPS) services, and it aims to continue to enlarge the financial services and wealth management opportunities available to the public.
Millions of consumers all throughout India now turn to Paytm First Games, a member of the same group of companies and a joint venture between One97 Communications Ltd and AG Tech Holdings, for their gaming and at-home entertainment needs. The platform offers a vast selection of games for beginners as well as professional esports to accommodate all different types of gamers.
A brokerage licence has been obtained by Paytm Insurance, a wholly owned subsidiary of One97 Communications Ltd (OCL). It provides insurance products in four categories, including two-wheeler, four-wheeler, health, and life, to millions of Indian consumers. The business wants to make insurance simpler and give customers a simple, intuitive online experience.
There are two different Paytm revenue /model structures. Paytm receives commissions from customer transactions made using its platform. The accounts from which they derive their money are escrow accounts. It provides customers with little intrigue, as is evident from the absence of its hidden capital. Paytm has accrued income totalling 3.314.8 crore INR since 2018.
In 2017–18, Paytm verified 2.5 billion transactions. Paytm said that it increased its gross transaction value (GTV) from $25 billion to $50 billion from 2018 to 2019. GTV is a measurement of the intensity of its transactions.
Paytm has launched a lot more. On the portal, users may purchase tickets for events, movies, theme parks, and flights. Later, Paytm QR was introduced along with gift cards. Citibank and Paytm even collaborated to introduce credit cards. The Paytm IPO failed for a variety of reasons. Its unreasonably inflated listing was the main reason behind Paytm's stock market decline. Analysts and industry professionals have long brought attention to the unicorn's exaggerated value, which ended up being a reason for disaster.
The IPOs was priced at Rs. 2,150 per share which was substantially more than the company's true valuation, the shares where subscribed more than 1.8 times in the IPO. Paytm's parent company, One97 Communication, was trading at 49.7 times its FY21 sales. At that time, the business wasn't even showing a profit. The absence of a licence to operate in the loan industry is one of the main causes of fear.
Any fintech company's lending sections generate the most profitable revenue. To earn the respect of analysts, a financial services provider needs to have a lending business. But Paytm lacks the license to operate in this area of the fintech business. This might be another reason for the questionable future of Paytm and failed of IPO.
PhonePe, which accounts for 42% of all UPI transactions in the nation, poses the biggest threat to the business. Other well-known brands like BHIM and Google Pay come after it. Together, PhonePe and Google Pay account for more than 82 percent of the UPI market in India, which has significant implications for Paytm's future in this market (Mahajan, 2022; Pandey, 2021).