PayU, a financial technology company supported by Prosus is preparing to make its debut on the stock exchange. Its estimated value is expected to be $6- 6.5 billion. The company, led by Arvind Agarwal, who previously served as CFO, at Nykaa plans to share its draft prospectus in the year. PayU has a track record of success. Is experiencing increasing revenues positioning it for an exciting journey, toward an initial public offering (IPO).
PayU, a fintech and payment processing company backed by Prosus, a technology investment giant from the Netherlands, is making plans to go public in India next year, aiming for a valuation in the range of $6 to $6.5 billion. Sources have revealed that the company intends to release a draft red herring prospectus (DRHP) by the end of this year or early next year.
To prepare for its IPO journey, PayU appointed Arvind Agarwal, the former CFO of Nykaa, as its own CFO in November 2022. A senior executive from PayU, who preferred to remain anonymous, disclosed this information. In the fiscal year ending in March 2023, PayU India achieved a revenue of $400 million, demonstrating a notable growth rate of 31%, as stated in an official company announcement. Based on this robust growth and profitability, insiders suggest that the company’s valuation could potentially land anywhere between $4 billion to $6 billion.
However, adjustments might be considered to the valuation if market conditions require it, although it is early to engage in discussions about this aspect, according to the PayU executive. The choice of hiring Arvind Agarwal as CFO was attributed to his experience in guiding startups through the intricate regulatory landscape of Indian IPOs. Notably, PayU has not yet engaged any investment bankers.
Arvind Agarwal, who served as Nykaa’s CFO from July 2020 to November 2022, was instrumental in Nykaa’s listing on the stock markets in November 2021. He also played a key role in overseeing the merger of Vodafone India with Idea Cellular in 2018.
PayU’s Journey in India:
A PayU executive shared that Prosus has been actively divesting its non-core assets since the latter part of the previous year, concentrating its efforts on preparing for the IPO. In India, PayU operates alongside its subsidiaries, Wibmo, a payment authentication platform, and PayU Finance, a non-banking financial company focusing on credit services. Notably, Prosus recently sold Olx Auto’s India division to CarTrade for Rs 537 crore.
On August 1, PayU announced the sale of most of its international businesses outside of India to Rapyd for a sum of $610 million. The company’s strategic move is geared towards sharpening its focus on the lucrative payment and credit opportunities within the Indian market. Bob van Dijk, the CEO of Prosus and Naspers, emphasized this shift, highlighting the significant fintech prospects in India and PayU’s prominent role in payments.
It’s worth mentioning that PayU had previously inked a deal to acquire rival payment firm Billdesk for $4.7 billion in August 2021. However, this agreement was later terminated in October 2022.
Comparatively, Paytm, a payments company with a diverse portfolio encompassing both consumer and merchant services, as well as a robust credit facilitating platform, is currently valued at approximately $6.25 billion as of August 2nd.
