Paytm said the market regulator issued a written warning to Paytm Money to take corrective steps following which Paytm Money submitted its response last July. To start with, SEBI has observed ‘certain violations’ of laws and regulations by Paytm Money on its uploading of clients’ KYC data and providing investment advice. Paytm’s DRHP also revealed quite a few regulatory warnings the company has received from institutions like the SEBI, RBI and IRDAI. Total expenses fell to nearly Rs 4,783 crore from Rs 6,138 crore in FY20. Marketing and promotional spends were down 61% to Rs 532 crore during FY21 from Rs 1,397 crore a year ago. The company reported flat consolidated revenue in FY20 for a second consecutive year, as it cut spending on discounts, cashbacks and promotions, which helped reduce losses by 30% but impacted revenue growth. In FY20 and FY21, it reported losses of Rs 2,943 crore and Rs 1,704 crore, respectively. Paytm is expecting its operating expenses to increase as it plans to hire additional personnel and expand operations and infrastructure in India and abroad. “Because the market for our platforms, products and services is evolving, it is difficult for us to predict our future results of operations or the limits of our market opportunity," it said in its draft IPO filings. The SoftBank- and Alibaba-backed company said it will continue to make losses in the foreseeable future. The rest of it would be for general corporate purposes. It would invest up to Rs 2,000 crore for new business initiatives, acquisitions and strategic partnerships.
Warren Buffet’s Berkshire Hathaway Holdings, which owns 17 million Paytm shares, will offload a tiny portion-about 1,200 shares-in the IPO, the DRHP stated.Īlso Read: Red herring, red flags: Top 10 takeaways from Paytm’s draft IPO filingįrom the proceeds of the IPO, Paytm said it plans to use Rs 4,300 crore to grow and strengthen its ecosystem through "acquisition and retention of consumers and merchants" by providing them with greater access to technology and financial services. Ratan Tata, who owns around 75,000 Paytm shares through RNT Associates, is planning to offload some of them. This is because Paytm wants to bring down Ant’s stake to below 25% to comply with Sebi's norms for listing as a ‘professionally managed company’, according to ET’s sources. On Friday, ET reported that Ant Group is likely to bring down its holding in Paytm to 25% or less from its current holding of 30.33% in the fintech major’s parent-One97 Communications, before the latter debuts on the Indian exchanges. Before the Chinese government thwarted Ant’s IPO plans last year, Paytm was mentioned as one of the companies in Ant’s draft prospectus where the Chinese fintech major had influence.
Sharma’s brother Ajay Shekhar Sharma is also listed as ‘relatives of individuals owning interest in the voting power of the Group that gives the control or significant influence’. Paytm listed all its major shareholders mentioned above as entities having "significant influence" over the company. In its draft filing, Paytm said it currently is a “foreign-owned and controlled” company and will continue to be so after the IPO, in accordance with the consolidated FDI policy and foreign exchange rules and “accordingly we shall be subject to Indian foreign investment laws”. According to the DRHP, investors in the pre-IPO round will have a lock-in period of one year before they can sell their shares. Up to 60% of the QIB portion may be allotted to anchor investors. 75% of Paytm’s public issue will be reserved for qualified institutional buyers (QIBs) while 15% for non-institutional investors (NIIs) and the balance 10% for retail investors.
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