India's popular digital financial services platform Paytm today announced that its subsidiary Paytm Money will now facilitate investments in Initial Public Offers (IPO) in India.
The company said the new facility will help retail investors with wealth creation opportunities through an easier application process. It further said that the process of IPO application on Paytm Money is completely digital for investors across the country.
Paytm Money will enable investors to instantly apply for all the latest IPOs via UPI ID, linked to their bank accounts to quickly complete the IPO application process.
The company is leveraging the convenience of UPI infrastructure to offer a faster turnaround time reduced to 3-4 days for completion of the entire process.
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Paytm Money to tap into growing IPO market
In a press statement, Paytm said the platform offers a seamless interface to make changes, cancel or reapply the bidding application within the IPO window.
"It is equipped with features enabling investors to track upcoming IPOs, view company history & details, download prospectus, and also check the performance of past IPOs," the company said.
This service is available on both the Paytm Money app and website.
Varun Sridhar, CEO - Paytm Money said, “The Indian start-up ecosystem has a growing appetite for entering the capital market, now more companies want to raise capital from a broader set of investors with a public listing. Likewise, investors are also increasingly willing to diversify their portfolio. This presents a big opportunity and we intend to make the process more accessible to our fellow citizens."
Paytm also plans to launch IPO funding, derivatives trading, margin finance and a host of other value-adding features to make investing seamless and convenient.
Paytm Money-Zerodha competition will be interesting
According to National Stock Exchange, 97.5 percent of its total 2.78 crore participants are individual investors. Also, as per the data data available with the Indian stock exchanges, 12 initial public offerings (IPOs) in 2020 so far raised around Rs 25,000 crore, significantly higher than Rs 12,362 crore mopped up through 16 initial share-sales in the entire 2019. This figure is expected to rise further as Burger King's Rs 810-crore initial share-sale is scheduled to open on December 2.
Paytm Money’s competitor will be the market leader in this segment, Zerodha. The latter is one of the largest digital brokers based on the number of IPO applications.
Zerodha has also launched a new platform that will help users to gift stocks, exchange traded funds (ETFs), and gold bonds to others. The company also said that it will enable gifting of mutual funds to minors.
Other digital wealth management platforms that allow users to participate in IPOs are Groww and Upstox.
Paytm Money, the wealth management arm of Paytm, is said to have reached a customer base of 6.6 million
Zerodha, for its part, claims to have 3 million users, of which 65% are first-time investors.
Paytm Money started offering stock-broking service in August. Zerodha has been in the space for nearly a decade. The Bengaluru-based company was recently valued at $1 billion. It says it facilitates 5 million orders daily. This accounts for almost 15% of India’s daily equity transaction volume.
