Paytm rejigs board ahead of its $2.2 billion IPO

Fintech firm Paytm has inducted Douglas Lehman Feagin, senior vice president at Ant Group, to its board as an additional director, replacing Eric Xiandong Jing, the chief executive of China’s largest fintech conglomerate Ant Group, regulatory filings accessed by ET showed.

The move comes ahead of its
much-anticipated $2.2 billion Initial Public Offering (IPO), expected in November.

Ashit Lilani, the managing partner of Saama Capital, has joined Paytm’s board as an independent director. Existing members Michael Yuen Jen of Alibaba and Todd Anthony Combs of Berkshire Hathaway have left. Vikas Agnihotri of SoftBank Vision Fund has come in as an alternate director, the filings showed.

Ting Hong Kenny Ho and Guoming Cheng of the Alibaba Group, who were alternate directors, have seen their terms expire, the filings showed.

“Some of these changes are on account of Paytm’s rotational retirement policy,” said a source aware of the matter.

Paytm also approved the placement of 544,000 new shares to employees as well as ex-employees under its employee stock ownership plan (Esop) in a meeting held on June 30.

A spokesperson for Paytm declined to comment.

Paytm’s other directors include founder Vijay Shekhar Sharma; Ravi Chandra Adusumalli, managing director at Elevation Capital Partners; Pallavi Shardul Shroff, the managing partner of Shardul Amarchand Mangaldas, and Mark Schwartz, chairman of Goldman Sachs APAC.

In all, there are 12 members on Paytm’s board including three other alternate directors, and two Paytm senior executives,

In April, Paytm said it had issued 242,904 fresh stock options to its existing Esop pool.

Last month, the startup invited its long-term shareholders including current and former employees to
dilute their stakes at the upcoming IPO through an Offer for Sale subscription directly through the exchanges. It is estimated that the OFS component in the deal would be around $600 million.

ET on Monday
reported that Paytm’s Initial Public Offering (IPO) will be worth around Rs 16,600 crore (about $2.23 billion) and the Noida-based fintech firm is likely to file a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) soon after its extraordinary general meeting (EGM) on July 12. The company is seeking a valuation in the range of $24-$30 billion.

The fintech startup, which is backed by China’s Alibaba and Japan’s SoftBank, is currently valued at $16 billion. Ant Group and Alibaba own nearly 38% of One97 Communications, Paytm’s parent entity. SoftBank holds 18.73%, while Elevation Capital (formerly SAIF Partners) has a 17.65% stake.

Startups including Zomato, Nykaa and Policybazaar are also
expected to launch their IPOs later this year.

Paytm has said previously that founder Vijay Shekhar Sharma would no longer be classified as a promoter to ease the compliance processes with the market regulator. The startup could also raise a fresh pre-IPO round before November, sources told ET earlier.

Paytm is currently the second highest-valued Indian startup after ed-tech startup Byju’s, which is now
valued at $16.5 billion.

Although experts have raised apprehensions over its target valuation of close to $30 billion, Paytm insiders remain confident that “positive momentum” in India’s capital markets can fetch the startup a valuation north of $24 billion.

In the previous fiscal year, One97 Communications’ consolidated revenue from operations fell 14% to Rs 2,802 crore, according to its annual report. Losses, however, narrowed to Rs 1,701 crore during the period, from Rs 2,942 crore in financial year 2020.