Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.

Portfolio

Loading...
Select Portfolio and Asset Combination for Display on Market Band
Select Portfolio
Select Asset Class
Show More
Download ET MARKETS APP

Get ET Markets in your own language

DOWNLOAD THE APP NOW

+91

CHOOSE LANGUAGE

ENG

  • ENG - English
  • HIN - हिन्दी
  • GUJ - ગુજરાતી
  • MAR - मराठी
  • BEN - বাংলা
  • KAN - ಕನ್ನಡ
  • ORI - ଓଡିଆ
  • TEL - తెలుగు
  • TAM - தமிழ்
Drag according to your convenience
ET NOW RADIO
ET NOW
TIMES NOW

Miracle of Omaha: Valuation of Paytm owner may hit $16 billion

, ET Bureau|
Oct 11, 2018, 07.56 AM IST
0Comments
paytm1
For the next 12 months, Paytm’s target is to double its gross transaction value to $100 billion on an annualised basis.
BENGALURU: One97 Communications, which owns India’s largest payments player Paytm, could see its valuation more than double from last year to $16 billion as it has started seeing a surge in investor interest after the recent infusion of $300 million by Berkshire Hathaway, according to investors and bankers familiar with the development.

The company is in talks with investors from US and China to sell a secondary of existing employees shares and small shareholders like MediaTek, according to these sources.

“The value of the transaction is still being finalised but could range between $100-200 million,” said one of the people cited above.

Blackstone, one of the world’s largest private equity firms, and US-based hedge fund Dragoneer Investment Group, which recently scooped up stake in IPO bound ride-hailing giant Uber, are in talks with the company.

Several Chinese investment firms are also looking at an investment, said these sources. Besides employee shares, these firms may also buy also some stake held by Taiwanese chipmaker MediaTek.

Email queries sent to Paytm and Dragoneer did not elicit a response at the time of filing this article. A Blackstone spokesperson declined to comment.

paytmgraph

Dragoneer, which manages over $4 billion, has backed companies like Alibaba and Facebook. In India, it had picked up a stake in Flipkart at $1.6 billion in 2013 and sold it when Walmart acquired 77% stake in the company at a valuation of $22 billion recently. Blackstone, which has $439 billion in assets under management, has backed several outsourcing and IT services companies like Intelenet and Mphasis in India. It also has stake in FINO, which also has a payment bank license, which according to reports it is now planning to sell.

The development could mark a significant jump in the valuation of Vijay Shekhar Sharma-promoted Paytm from around $7 billion when it closed a $1.4 billion round from SoftBank Vision Fund in late 2017. It would also be an over 50% increase in $10 billion valuation since it raised money from Berkshire Hathaway, which was the first investment by the Warren Buffetowned company in a private technology company in the world.

The interest of global investors has increased significantly in the company since Berkshire infusion. “I have unsolicited requests from investors in the US and Europe sending me their profiles and asking if I can help them get some shares in the in the company,” said an investment banker. This would be the third major secondary for ESOPs (employee stock ownership plans) being executed by Paytm in the last two years.

In March 2017, around 47 employees at the Noida-based company sold shares worth about Rs 100 crore when it was valued at $4.8 billion. Then earlier this year it saw share sale worth Rs 300 crore to investors including hedge fund Discovery Capital which created about two dozen dollar millionaires.

Paytm has been diversifying and strengthening investor base as it looks to cement market leadership against Flipkart-backed PhonePe and Google’s Tez besides potential competition from Facebook-owned WhatsApp and Reliance Jio.

For the next 12 months, Paytm’s target is to double its gross transaction value to $100 billion on an annualised basis. It is also looking to double its merchant base to 16 million.
0Comments

Also Read

Paytm adds new feature to Inbox

Paytm in discussions to buy UCWeb’s India biz

Paytm Mall beefs up its leadership team

Paytm Mall working with 100 FMCG Brands

Paytm forays into forex service

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Loading
Please wait...