Paytm is considering cancelling its pre-IPO sale strategy due to valuation discrepancies

According to persons familiar with the situation, Paytm, the Indian digital payments pioneer backed by Jack Ma’s Ant Group Co. is considering canceling its planned 20 billion rupee ($268 million) share sale ahead of its initial public offering due to valuation disparities.

According to several of the people who did not want to be identified because the material is confidential, the firm had been seeking a valuation of more than $20 billion based on early investor reaction, while advisers on the sale advocated a lower price. According to unicorn tracker CB Insights, the company was last valued at $16 billion.

Paytm, formerly known as One97 Communications Ltd., aims to capitalize on robust investor demand powered by easy liquidity, which has boosted India’s blockbuster IPOs this year. After growing competition from Walmart Inc.’s Flipkart and Amazon.com Inc. cutting its e-commerce and cloud sales by the same amount, the firm reported a 10% reduction in revenue for the year ending March 2021.

According to the sources, a final decision has yet to be taken, and Paytm may yet explore a pre-IPO sell at a lesser valuation. According to some sources, regulators are anticipated to approve the listing in the coming days.

The company’s representatives did not respond to an email requesting a comment.

Morgan Stanley, Goldman Sachs Group Inc., Citigroup Inc., and ICICI Securities Ltd. are among the banks participating in the share offering. Paytm indicated in its Draft Red Herring Prospectus filed with the Securities and Exchange Board of India on July 16 that it may contemplate a pre-IPO placement of up to 20 billion rupees.