After reports of Paytm’s plans to go public with launch of an initial public offering (IPO), unlisted share prices of its parent company One97 Communications witnessed a nearly 75 per cent rise, reported The Mint. The Paytm board had met on May 28 to discuss the IPO proposal that aims to raise $ 3 billion from the market. However, the company has not made an official announcement about their plans to go for the IPO listing.
If and when the listing happens, One97 Communications is likely to go for an IPO with almost double its valuation. The company was last valued at $16 billion when it raised $ 1 billion from Softbank and Ant Financial in 2019.
The company’s share prices in the grey market jumped from Rs 11,500 to Rs 21,000 in a week following the listing reports. The last time these stocks saw a similar high price level was in early 2020 when the company’s shares touched the price point of Rs 19000 per share, following which it plunged by Rs 8500 per share in the grey market in May 2020. However, the current levels have crossed last year high now.
Grey market refers to the unofficial markets for IPOs where the share of a company is traded before they get listed. Although no actual delivery of shares takes place before the official listings. an unofficial future/forward contract is made. These markets are beyond the purview of the Securities and Exchange Board of India (SEBI).
Apart from Paytm, a number of young businesses in India, including Policybazaar, Nykaa, Delhivery and MobiKwik, are also reportedly firming up plans to launch their IPOs.
In fact, in April this year, online food delivery platform Zomato filed its preliminary papers for an IPO with the market regulators Security and Exchange Board of India (SEBI) to raise USD 1.13 billion nearly (Rs 8,250 crore)
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