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Jack Ma likely to reap 7x returns in Paytm IPO, Warren Buffett 3x

After the first unicorn landing on Dalal Street, another has intimated of its arrival, and that too with a big bang. Paytm’s parent company One 97 Communications on Friday filed IPO papers with Sebi for its Rs 16,600 crore issue.

The issue, if the size does not change by the time the IPO is launched, will be the biggest ever on Dalal Street. Till now, Rs 15,475 crore IPO of in 2010 holds that record.

As part of the IPO, the Softbank-backed company will issue fresh shares worth Rs 8,300 crore at a face value of Re 1 each, whereas existing shareholders will offload their stake worth another Rs 8,300 crore.
Among the selling shareholders include investment firms run by Jack Ma, Warren Buffett along with SAIF, SVF Partner, Anfin, Elevation Capital and Vijay Sekhar Sharma, who is the founder of the firm.

In the unofficial market for unlisted shares, Paytm shares are trading at around Rs 2,400 apiece, dealers active in the grey market said. At this price, the company is valued at over $19 billion, or Rs 1,45,423 crore.

Going by market speculation, Paytm is eyeing a valuation of $25-30 billion. If that’s true, then the IPO price could be fixed anywhere between Rs 3,150 and Rs 3,800. And, this will mean a bountiful reward for the pre-IPO investors.

Jack Ma’s Alibaba stands to gain nearly 7 times the average cost of acquisition at Rs 583.40. Warren Buffett’s BH International Holdings stands to take home nearly 3 times returns on investment. Its average cost of acquisition was Rs 1,278.70.

Paytm investors likely to gain big
Assuming the IPO price band is around the speculated Rs 3,800 apiece, some investors will take home nearly 250 times their initial investments.

Investor Shares held CoA  Returns (times)
SAIF III Mauritius Company 9,41,80,780 15 246.75
Elevation Capital V FII Holdings 42,33,000 78 48.91
SAIF Partners India IV 3,96,59,140 306 12.43
Elevation Capital V 56,19,940 442 8.60
Mountain Capital Fund 60,66,680 547 6.95 Singapore E-Commerce 4,42,82,140 583 6.51
BH International 1,70,27,130 1,279 2.97
DG PTM LP 47,62,270 1,708 2.23
SVF Panther (Cayman) 78,55,970 1,820 2.09
Antfin (Netherlands) Holding 18,33,01,220 1,833 2.07

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