PayU India, a fintech company backed by Prosus, has expressed its intention to submit a draft red herring prospectus (DRHP) to the markets regulator SEBI in February, outlining plans for an initial public offering (IPO) valued at a minimum of USD 500 million.
The company aims to be listed on the stock exchanges by the end of 2024. For the IPO, PayU has engaged the services of advisory firms Goldman Sachs, Morgan Stanley and Bank of America. Furthermore, PayU plans to enlist the services of at least one Indian investment bank for this transaction, as reported by Reuters,.
The IPO is expected to attribute a valuation ranging from USD 5 billion to USD 7 billion to the company, as estimated in the media.
The surge in smartphone usage has led to millions of Indians relying on digital payment services on a daily basis. According to a report by Boston Consulting Group and PhonePe, the market is anticipated to grow significantly, reaching USD 10 trillion in 2026 from USD 3 trillion in 2022.
In June, PayU reported a 31 per cent increase in its India revenue, totaling USD 399 million, attributed to the growth in enterprise and small and medium-sized businesses. Recently, the company appointed Anirban Mukherjee, its India CEO, as the global chief executive.
PayU’s IPO is poised to become one of the most prominent fintech listings in India in recent years. Notably, Paytm, backed by Softbank, raised USD 2.5 billion in its 2021 IPO but experienced a decline in its stock value shortly thereafter, primarily due to concerns about its valuation.
Several Indian tech companies contemplating stock market debuts in recent years have faced scrutiny from financial institutions and investors who question their high valuations. In addition, many smaller startups have faced challenges due to a funding squeeze in recent months.
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