Following the news that Paytm is set to raise more than $2.4bn at a valuation of $20bn in India’s biggest IPO;

Swati Verma, Associate Project Manager of Thematic Research at GlobalData, offers her view:

“Originally a cash-centric society, India has become one of the fastest-growing mobile payment markets over the last few years, and the COVID-19 pandemic has only accelerated the shift away from cash. Paytm, one of the top 10 global mobile payments unicorns (privately-held companies worth $1bn or more) has also reaped the benefits. The company is now set to take the next big leap, by going public. This will futher strengthen its position in the Indian market.

“India is second only to China in the use of mobile payments. According to GlobalData, 23.2 billion mobile payment transactions took place in India in 2020, worth $513bn. The Indian mobile payments market is expected to grow at a comput annual growth rate (CAGR) of 41% between 2020 and 2024 and will be worth more than $2 trillion by 2024. The huge demand offers a fertile ground for several digital payments players, including the tech giants and startups.

“Paytm, India’s only fintech ‘decacorn’ (unicorn with a valuation of more than $10 billion), competes with giants like Amazon Pay, Google Pay and Walmart’s PhonePe. The company, backed by Ant Group, Alibaba, and Softbank, has maintained a strong position in the India market. It enjoys 11% market share in ecommerce transactions and 13% market share in peer-to-peer (P2P) transfers.

“Now Paytm is ready to list and the funds raised from the listing will allow it to maintain a prominent position in the highly competitive Indian market. In addition, GlobalData expects it to expand beyond its core business and become a leading super-app like Alipay by integrating services such as shopping, gaming, travel, insurance and investments.”