Paymate India Limited IPO

A RedSeer report labelled Paymate India Limited as one of India’s most prominent B2B payment service providers. This platform assists in digitising and streamlining payments among large and SME businesses across supply chains.

Paymate India has refiled its Draft Red Herring Prospectus to SEBI after working on the suggested changes by the latter. The company plans to raise approximately Rs. 15,000 million through fresh issue and offer for sale. As it waits for the market regulator to approve this new document, you can go through the draft papers to decide whether or not to invest in Paymate India Ltd. IPO.

If you find the DRHP tough to comprehend, this blog is for you. Keep reading till the end to know the important details about Paymate India Ltd.

About the Company

Paymate India Limited is a prominent B2B payment and service provider that helps streamline, automate and digitise payments between large and SME businesses. With its digital payment feature, Paymate India seeks to improve B2B payments in supply chains.

Paymate India Ltd. hosts an integrated platform offering multiple payment categories for various business requirements. Some of them are vendor payments and statutory and utility payments with a fully integrated payment system for customers.

The company’s customer base as of 31 December, 2021 is a total of 49,953 customers. Out of this, 480 firms are large businesses while 49,473 companies are small and medium-sized MNCs. Some of the big names among Paymate India Private Limited clients are SBI Cards and Payment Services Limited, Kansai Nerolac Paints Limited, Jay Bharat Maruti Limited and Crompton Greaves Consumer Electricals Limited. 

Paymate India Limited stands out as the largest B2B payment player in India today. This company is also among the fastest-growing platforms to provide online and card-based payment processes regarding TPV processing till December 2021. 

As per its DRHP, Paymate India Private Limited’s annual revenue grew from Rs. 2,713.30 million in FY 2020 to Rs. 3,489.86 million in FY 2022. However, after-tax expenses, the company suffered a loss of Rs. 253.66 million in 2020 to Rs. 162.18 million in FY 2022.

IPO Details and Objectives

Paymate India Ltd. filed a DRHP with SEBI with the proposal to launch an IPO in May 2022. According to it, the company plans to offer a fresh issue worth Rs. 11,250 million and an Offer for Sale worth Rs. 3,750 million. The selling shareholders for this OFS are Ajay Adiseshan, Lightbox Ventures I, Viswanathan Subramanian, RSP India Funds LLC, Mayfield, and FVCI Limited.

JM Financial Limited and ICICI Securities Limited have been appointed as the Book-Running Lead Managers for the Paymate India Ltd. IPO. The company along with its BRLM has set the face value for each equity share of the IPO at Rs. 1. After its IPO launches, the equity shares are likely to get listed on BSE and NSE. 

After the submission of these preliminary documents, SEBI returned it suggesting certain changes. After making the required amendments and updates, Paymate India Limited has refiled its DRHP with SEBI and is currently awaiting for green signal to go ahead with IPO. 

With the earnings from the upcoming IPO, the company plans to fulfil certain objectives. It will use some funds on business expansion across different geographical territories, focus on inorganic initiatives, and use cash as collateral to improve margins with financial institutional partners. The company will also utilise some of the net proceeds for general corporate purposes. 

Also Read: How does an IPO work?

Strengths

As an investor, you must know the strengths and weaknesses of Paymate India Limited to make an informed investment decision. Go through the points below to learn about this company’s strengths:

• Paymate India Ltd. is a leading B2B payment and service provider with digital methods that streamline and automate payments across supply chains.
• The company is committed towards increasing on user engagement and ensures long-term customer relationships with customers.
• Paymate India Ltd. is a data-driven technology platform. Its in-house technology along with its banking platform allows the company to bridge the gap between vendors and customers.
• This company also lays a strong focus on risk management and secure transactions to retain customers. It also implements fraud prevention measures to ensure cybersecurity for digital payment purposes.
• This company is run by an experienced team of managers and marquee shareholders.

Risks Associated

Besides the above strengths, here are a few risks associated with Paymate India Limited IPO you must know before planning your investment. 

• Paymate India Ltd. has to deal with frequently changing laws and regulations of various governing bodies. Failure to comply with any regulations set by RBI’s Payment Aggregator Guidelines will affect its business adversely. A compliance failure may lead to the probability of this company being out of business.
• This company relies on its top five customers for a significant portion of its revenue. Any discontinuation of business from the clients’ end can hamper this company’s business and cash flow.
• Paymate India highly relies on the contract and arrangement with Visa Inc regarding B2B digitised transactions. Any bump in the company’s relationship with Visa Inc can lead to the termination of these contracts. This can adversely affect the company’s business, growth prospects, and operations.

Summary

The above information on Paymate India Limited IPO will help you make an informed decision regarding investments. You must also keep your risk appetite, financial goals and the company’s goals as you plan your strategy. If you are a novice investor, consider seeking expert guidance to help you know these parameters better. 

Also Read: IPO investment strategy

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