3 early investors to sell Paytm shares worth up to Rs 2,002 crore at 5% discount

Three investors in One 97 Communications, the parent company of Paytm, are looking to sell shares worth up to Rs 2,002 crore through a screen-based transaction on Indian stock exchanges. The transaction is a 100% secondary share sale, which means the company will not receive any money from the deal. The shares will be sold by Saif Partners India IV, Saif III Mauritius Company and Elevation Capital V, according to the term sheet.

The base offer size is up to 1.49 crore shares, representing about 2.3% of Paytm’s existing share capital. The base deal size is up to Rs 2002 crore, or about $210 million. Morgan Stanley India Company Pvt Ltd is the placement agent for the transaction.

The floor price at 5% discount. The offer floor price has been fixed at Rs 1,339.65 per share. This is a 4.99% discount to Paytm’s closing price of Rs 1,410 on August 3.

The books opened on August 3 and are expected to close around 7 am IST on August 4, with an option to close earlier. The expected trade date is August 4, while settlement is expected on August 5.

The term sheet said no guidance will be given on pricing until the shares are crossed on Indian stock exchanges on August 4. It also said investors should indicate demand across the price range.

Saif entities hold key stake in Paytm
Before the transaction, Saif Partners India IV held about 23.2 million Paytm shares, or around 3.63% of the company’s existing share capital. Saif III Mauritius Company held about 54.7 million shares, or around 8.55% of the company’s existing share capital.Elevation Capital V holding was not disclosed in the term sheet. The shareholding pattern was disclosed on BSE on August 3. The vendors, their agents and nominees will be under a 60-day lock-up after the transaction.

Large investor exits through block deals are common after a stock has seen a strong rally. They allow early investors to reduce holdings while giving institutional buyers a chance to buy a large quantity of shares in one transaction.