Paytm Mall raises Rs 1,508.93 crore

Paytm Mall, owned by Paytm E-Commerce Private Limited, on Tuesday raised Rs 1,509 crore by issuing equity shares to Japanese technology investor SoftBank.

In a regulatory filing accessed by DH from data analytics firm Paper.VC on Tuesday, the company has raised the fund from two entities of SoftBank, via Softbank UK arm SB Investment Holdings (UK) Limited and Alibaba.com Singapore Ecommerce Private Limited.

Paytm Ecommerce Private Limited offered a total of 237,705 shares for a face value of Rs 10 each. Alibaba.com Singapore Ecommerce Private Limited paid a premium of Rs 63,477.47 for each share for a total of 26,412 shares.

SB Investment Holding (UK) Limited paid a premium of Rs 63,478.41 per share for a total of 211,293 shares. The total deal is valued at Rs 1,508.93 crore.

Alibaba Group, the Chinese ecommerce giant, holds 46% stake in Paytm Mall, the online marketplace spun off from Vijay Shekhar Sharma-owned Paytm holding company One97 Communications.

Venture capital firm SAIF Partners holds 20% stake in the company, the second largest shareholder. SoftBank’s investment in April valued Paytm Mall at $1.9 billion, making it a unicorn.

According to advisory services firm GrowthEnabler Chief Executive Rajeev Banduni, India is a unique ecommerce market witnessing a three-way battle involving US retail majors Walmart and Amazon, and China’s Alibaba.

"If SoftBank exits India's leading ecommerce player Flipkart and invests additional capital in Paytm Mall, the alignments would become similar to the Chinese market. SoftBank is a big shareholder in Alibaba, which competes with Tencent and Walmart-backed JD.com in the Chinese market," said Banduni.

According to Forrester Research report, Paytm Mall market share during its first full year of operation in 2017 was about 5.6%. The gross merchandise volume or gross sales during that time was about $1 billion.

While Flipkart Group, including online fashion retailers Myntra and Jabong, holds a combined market share of 39.1%, Amazon India has 31.1% market share in Indian ecommerce industry.

Paytm Mall primarily focuses on its online-to-offline (O2O) model and drives almost 60% of its overall sales through its partnership with 75,000 stores. Amit Sinha, who is appointed as COO, is working hard to triple its offline presence by the end of 2019.

One97 Communications also issued 1,16,001 equity shares to eight parties, including one Singapore-based technology company and seven Indians and raised Rs 122 crore.