Blog

Market regulator Securities and Exchange Board of India (SEBI) has returned the draft prospectus of the Rs 1,500 crore initial public offering (IPO) of Mumbai-based fintech platform PayMate India. 

The company filed the Draft Red Herring Prospectus (DRHP) with the regulatory body in May last year. The regulator has advised Paymate to refile it with certain updates. 

According to PTI, the company was asked to update DRHP with the final payment aggregator authorisation and other material updates, if any. The move may delay the company’s initial share sale.

PayMate obtained in-principle approval from RBI for payment aggregator authorisation in December 2022.

“Based on the SEBI communication we have received and following our receipt of in-principle approval from RBI for the Payment Aggregator (PA) authorisation recently, we will be in a position to submit the mandatory SAR (System Audit report) by the first or second week of February,” the company said in a statement.

SAR is a part of the standard operating protocol to get the final approved PA authorisation. 

“We are confident of a quick turnaround by RBI; and thereafter refiling DRHP with relevant updates along with the RBI final approval,” Paymate India said.

The proposed IPO comprises a fresh issue of Rs 1,125 crore and an offer-for-sale (OFS) of Rs 375 crore from its existing shareholders and promoters.  

In the OFS, promoters Ajay Adiseshan and Vishvanathan Subramanian will sell up to Rs 134.73 crore and Rs 3.29 crore, respectively. Institutional investor Lightbox Ventures will sell up to Rs 127.38 crore, Mayfield FVCI Ltd will sell up to Rs 15.66 crore, and RSP India Fund will sell up to Rs 2.74 crore. 

The offer also includes a reservation for subscription by eligible employees. As of the date of the DRHP filing in May 2022, the promoter and promoter group held 66.7% of the company and the rest was held by public shareholders.

According to an update on the SEBI’s website, the regulator returned the company’s DRHP on January 17, 2023, with advice to re-file the document post applicable updates/revisions.

PayMate is a B2B payment and services provider that digitises, automates, and streamlines business-to-business payments in supply chains. Its platform provides upgradation from traditional paper-based workflows to software-driven workloads with digital payment streams like digital invoicing and several complementary features. The company has a presence in India and the UAE, and is aiming to also expand across Central Europe, Middle East and Africa (CEMEA).

Earlier this month, SEBI also returned the draft IPO papers of home-grown mobile maker Lava International and Oravel Stays Ltd, the parent company of hospitality unicorn OYO, and asked them to refile the documents with certain updates.