Mumbai-based PayMate India, a B2B payments and services provider that digitizes, automates and streamlines business to business payments in supply chains, has filed its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO) with a fresh issue of Rs 1,125 crore and Offer-for-sale of Rs 375 crore.
The issue has a face value of Re 1 per equity share for the proposed share sale.
The Offer is being made through the Book Building Process, wherein not less than 75 percent of the Offer shall be available for allocation to Qualified Institutional Buyers, not more than 15 percent of the Offer shall be available for allocation to Non-Institutional Bidders and not more than 10 percent of the Offer shall be available for allocation to Retail Individual Bidders.
The Offer for Sale comprises up to Rs 134.73 crore by Ajay Adiseshan and up to Rs 3.29 crore by Vishvanathan Subramanian, up to Rs 127.38 crore by Lightbox Ventures I, up to Rs 15.66 crore by Mayfield FVCI, Ltd., up to Rs 2.74 crore by RSP India Fund. LLC, up to Rs 17.01 crore by IPO Wealth Holdings Pvt Ltd, up to Rs 1.96 crore by G. Adiseshan, up to Rs 11.45 crore by Uma Vishvanathan, up to Rs 15.37 crore by Dhruv Pratap Singh, up to Rs 26.56 crore by Probir Kumar Roy, up to Rs 13.27 crore by Alexander Kuruvilla and up to Rs 5.59 crore by Anand Rajaram.
The offer also includes a reservation for subscription by eligible employees.
Additionally, the company, in consultation with the lead bankers to the issue may consider a private placement of equity shares aggregating up to Rs 225 crore. If such placement is completed, the fresh issue size will be reduced.
As on date of the DRHP filing ,the promoter and promoter group held 66.70 percent in the company and rest was held by Public shareholders.
The proceeds from its fresh issuance worth Rs 77 crore will be utilised for Investment for expanding our business into new geographies, Rs 228 crore for pursuing inorganic initiatives, Rs 688.70 crore for placing cash as collateral with its financial institution partners to improve its margins and general corporate purposes.
PayMate has developed from a consumer-facing to a B2B payments platform since its inception in 2006.
It is a multi-payment category platform that incorporates vendor payments, statutory payments, and utility payments, giving its customers a “fully-integrated” B2B payment stack. The platform's strength comes from its flexibility to integrate with a variety of clients across their payment services spectrum. Crompton Greaves Consumer Electricals Limited, Kansai Nerolac Paints Limited, SBI Cards and Payment Services Limited, and Jay Bharat Maruti Limited are among the 480 enterprises that have subscribed to the enterprise plan on its platform ("Enterprise Customers") to receive payments from their buyers, dealers, and distributors.
The platform also allows consumers and their vendors, suppliers, buyers, dealers, and distributors to use commercial credit cards to make statutory payments of direct taxes and GST, as well as utility payments.
Visa has a partnership with PayMate. Visa cards accounted for more than 90 percent of commercial credit cards handled through the systems as of December 31, 2021. Visa is also a shareholder in PayMate, owning 2.94 percent of the fully diluted paid-up Equity Share capital.
The brand launched its platform in the UAE in 2018 through PayMate LLC, its subsidiary in the UAE, as a Visa-certified Business Payment Solution Provider. It is also aiming to expand into other parts of the Central Europe, Middle East and Africa region as well.
In fiscal 2021, it completed the merger with Zaitech Technologies, which has enabled it to integrate the credit evaluation and scoring technology of Zaitech Technologies with the payments platform, thereby offering an integrated payments and credit platform.
According to RedSeer report quotes in its DRHP, the total global TPV for B2B payments, excluding cross-border payments, increased from around $101 trillion (Rs 7846.91 trillion) in 2018 to $114 trillion (Rs 8856.91 trillion) in 2021, and is predicted to increase to almost $142 trillion (Rs 11032.29 trillion) in 2025, representing a CAGR of 5.7 percent from 2020. In 2021, the B2B payment market in India and the Gulf Cooperation Council (GCC) will be worth around $12 trillion (Rs 932.31 trillion), and by 2025, it will be worth around $17 trillion (Rs 1320.77 trillion).
PayMate’s revenue from operations increased 61.19 percent from Rs 216.14 crore in fiscal 2020 to Rs 348.40 crore in fiscal 2021, primarily due to an increase in the local transaction fees and international transaction fees. Revenue for the nine-month period ended December 2021 stood at Rs 843.44 crore.
ICICI Securities Limited, HSBC Securities and Capital Markets (India) Private Limited, JM Financial Limited and SBI Capital Markets Limited are the book running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.