A draft prospectus filed by the Indian digital payments firm Paytm shows that the company plans to raise as much as 166 billion rupees ($2.2 billion) through an initial public offering in Mumbai.

It was just two days ago that the online food delivery giant Zomato began raising a targeted $1.3 billion through a share sale.

According to data from Refinitiv, currently the largest tech offering India till date is the Zomato IPO. However a successful IPO by Paytm would upend that record. According to reports citing source information, the value of Paytm would be about $25 billion after its IPO.

The plan of Paytm is to utilize the money raised from the IPO to strengthen its payment services and for financing new business initiatives and acquisitions. Paytm is supported by investors such as Softbank, Berkshire Hathaway and Alibaba)-affiliate Ant Group.

According to CB Insights, the Noida-based company is one of India’s biggest startups and was valued at $16 billion during its last private fundraising round in 2020.

There are number of tech unicorns in India. Unicorns are firms that have reached a valuation of at least $1 billion. Analysts said that investors in the country will keenly watch Paytm’s IPO. Zomato is the first Indian tech unicorn to go public.

It is important for Indian startups to being showing consistent profits while also promising healthy exits for investors even as many of the startups have raised hundreds of millions of dollars from private markets and have been valued at extremely high levels, say some analysts.  

Paytm’s was found in 2000 with Vijay Shekhar Sharma founding its parent company, One97 Communications which was initially designed as a mobile services platform that offered horoscopes to cellular network providers. It later expanded into other services such as voice-based gaming and customized ringtones.

Paytm was formed about a decade later ion 2010 and designed initially as a platform to buy prepaid cellphone plans and paying cable bills online. India’s central bank gave approval to Paytm to launch the mobile wallet in 2012 which has now become its core business. It struck a partnership with Uber in 2014 to transform into a payment provider for the ride hailing company’s cab rides all across India. A year later Paytm struck a major agreement with the online booking portal for Indian Railways which sells nearly 25 million tickets a year.

But in 2014, the user base of the app suddenly exploded after the Indian Prime Minister Narendra Modi took the sudden decision of banning two biggest rupee notes in the country that accounted for almost 80 per cent of the country’s cash at the time.

The Indian economy was shocked by the decision as majority of transactions in the country then was done in cash. It left millions of Indians queuing up at ATMs for ling hours to exchange their notes just so they would have enough money for everyday expenses.

However at the same time, the hundreds of millions of smartphone users of the country began switching to mobile payment apps which boosted Paytm and its services.

The company currently has 114 million people using its payment service each year.

(Adapted from CNN.com)