Paytm Money, One97 Communications Ltd’s wealth management arm, will allow users on its platform to invest and participate in upcoming initial public offerings (IPOs) in India, it said on Sunday.
Paytm Money will allow investors from their Unified Payments Interface (UPI) ID-linked bank accounts to apply for the new IPOs immediately and complete the application process in three-four days.
An interface will also be offered by the platform to help users alter, cancel, or reapply bids inside the IPO window. It will also aim to incorporate features that allow investors to monitor upcoming IPOs, display the history of the company, download the draught prospectus, and verify the performance of previous IPOs. Both the Paytm Money app and the website will have this service available.
The new service will bring wealth-building opportunities to retail investors as they will be able to apply and enter the rapidly growing businesses’ growth story, the company said.
The ecosystem of Indian startups has an increasing appetite to reach the capital market. Now with a public offering, more businesses want to collect money from a larger range of investors. Investors are increasingly able to diversify their holdings as well. This poses a huge opportunity and we intend to make the process more available. We intend to introduce IPO financing, derivatives trading, margin finance, and a host of other value-added features shortly to make investing smooth and convenient,” said Varun Sridhar, Paytm Money’s chief executive officer.
Competitor Zerodha of Paytm Money, which started the service in August 2019, is touted by the number of IPO applications to be one of the biggest digital brokers. Groww and Upstox are other digital wealth management platforms that enable users to participate in IPOs.
The National Stock Exchange (NSE) and BSE raised a total of ~24,973 crores through 12 IPOs during March-November. SBI Cards, Mazagaon Dock, Rossari Biotech, Happiest Minds, and CAMS were some of the good IPOs. According to NSE’s results, Happiest Minds and Rossari Biotech were oversubscribed.
Paytm Money reported having 6.6 million subscribers in September, outperforming Zerodha’s 3 million.
70 percent of its users are first-time retail investors, Paytm Money said, while Zerodha said 65 percent of its users are new.
Zerodha also announced the launch of a new website earlier this month, enabling users to donate stocks, exchange-traded funds (ETFs), and gold bonds to others. The firm also said it would encourage mutual funds to be donated to minors.
Recently, Dilip Asbe, chief executive of India’s National Payments Corp. (NPCI), said that UPI has seen 10x growth in India and will expand at the same pace as new use cases, such as retail investment via UPI for IPOs and introducing features such as Autopay.
