India’s Largest B2B Payments Player, PayMate India Files DRHP for IPO to Raise Rs 1500 Cr

PayMate India (“The Company”), a leading B2B payments and services provider that digitizes, automates and streamlines business to business (“B2B”) payments in supply chains, has filed its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO) with a fresh issue of Rs 1125 crore and Offer-for-sale of Rs 375 crore.

The issue has a face value of Re 1 per equity share for the proposed share sale. The Offer is being made through the Book Building Process, wherein not less than 75% of the Offer shall be available for allocation to Qualified Institutional Buyers, not more than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidders.

The Offer for Sale comprises up to Rs 134.73 crore by Ajay Adiseshan and up to Rs 3.29 crore by Vishvanathan Subramanian (“Promoter Selling Shareholders”), up to Rs 127.38 crore by Lightbox Ventures I, up to Rs 15.66 crore by Mayfield FVCI, Ltd., up to Rs 2.74 crore by RSP India Fund. LLC, up to Rs 17.01 crore by IPO Wealth Holdings Pvt Ltd (“Investor Selling Shareholders”), up to Rs 1.96 crore by G. Adiseshan, up to Rs 11.45 crore by Uma Vishvanathan, up to Rs 15.37 crore by Dhruv Pratap Singh, up to Rs 26.56 crore by Probir Kumar Roy, up to Rs 13.27 crore by Alexander Kuruvilla and up to Rs 5.59 crore by Anand Rajaram (“Other Selling Shareholders”). The offer also includes a reservation for subscription by eligible employees.

Additionally, the company, in consultation with the lead bankers to the issue may consider a private placement of equity shares aggregating up to Rs 225 crore. If such placement is completed, the fresh issue size will be reduced.

As on date of the DRHP filing the promoter and promoter group held 66.70% in the company and rest was held by Public shareholders.

The proceeds from its fresh issuance worth Rs. 77 crore will be utilised for Investment for expanding our business into new geographies, Rs 228 crore for pursuing inorganic initiatives, Rs 688.70 crore for placing cash as collateral with its financial institution partners to improve its margins and general corporate purposes.

PayMate has developed from a consumer-facing to a B2B payments platform since its inception in 2006. They are a market leader in B2B payment services based on digital technologies, with a customer base that spans a wide range of industries, including IT distribution, FMCG, paints, financial services, cement, auto auxiliary, travel and airline, media, manufacturing, and logistics.

It is a multi-payment category platform that incorporates vendor payments, statutory payments, and utility payments, giving its customers a “fully-integrated” B2B payment stack. The platform's strength comes from its flexibility to integrate with a variety of clients across their payment services spectrum. Crompton Greaves Consumer Electricals Limited, Kansai Nerolac Paints Limited, SBI Cards and Payment Services Limited, and Jay Bharat Maruti Limited are among the 480 enterprises that have subscribed to the enterprise plan on its platform ("Enterprise Customers") to receive payments from their buyers, dealers, and distributors.

The platform also allows consumers and their vendors, suppliers, buyers, dealers, and distributors to use commercial credit cards to make statutory payments of direct taxes and GST, as well as utility payments.

Visa has a partnership with PayMate. Visa cards accounted for more than 90% of commercial credit cards handled through the systems as of December 31, 2021. Visa is also a shareholder in PayMate, owning 2.94 percent of the fully diluted paid-up Equity Share capital.

The brand launched its platform in the UAE in 2018 through PayMate LLC, its subsidiary in the UAE, as a Visa-certified Business Payment Solution Provider. It is also aiming to expand into other parts of the Central Europe, Middle East and Africa (“CEMEA”) region as well.

As on December 31, 2021, it had 49,953 Customers, of which 480 were Enterprise Customers and 49,473 were small and medium enterprises which subscribed for basic plan on its platform (“SME Customers”). In terms of Transaction processing volume (TPV) processed, it is India's largest B2B payments player and one of the fastest growing providers of on-line, card-based payment-processing services, with a TPV of ₹77,731.45 million in December 2021.

In Fiscal 2021, it completed the merger with Zaitech Technologies, which has enabled it to integrate the credit evaluation and scoring technology of Zaitech Technologies with the payments platform, thereby offering an integrated payments and credit platform.

According to RedSeer report quotes in its DRHP, the total global TPV for B2B payments, excluding cross-border payments, increased from around USD 101 trillion (Rs 7846.91 trillion) in 2018 to USD 114 trillion (Rs 8856.91 trillion) in 2021, and is predicted to increase to almost USD 142 trillion (Rs 11032.29 trillion) in 2025, representing a CAGR of 5.7 percent from 2020. In 2021, the B2B payment market in India and the Gulf Cooperation Council (GCC) will be worth around USD 12 trillion (Rs 932.31 trillion), and by 2025, it will be worth around USD 17 trillion (Rs 1320.77 trillion).

PayMate’s revenue from operations increased 61.19 percent from Rs 216.14 crore in Fiscal 2020 to Rs 348.40 crore in Fiscal 2021, primarily due to an increase in the local transaction fees and international transaction fees. Revenue for the nine-month period ended December 2021 stood at Rs 843.44 crore.

ICICI Securities Limited, HSBC Securities and Capital Markets (India) Private Limited, JM Financial Limited and SBI Capital Markets Limited are the book running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.

B2B Payments Platform PayMate Launches in KSA; Appoints ex-Visa Kevin Phalen as Independent Director

Launches Into The Kingdom of Saudi Arabia

PayMate announces its launch in the Kingdom of Saudi Arabia (KSA). Local large enterprises who adopt the PayMate platform can use bank-issued commercial cards on the platform to make early payments towards supplier invoices into their bank accounts and extend their days payables. All payments made and received using the platform will be automatically reconciled, giving a clear single view into the business’s cash flow. The users will also have access to the platform’s custom approval workflows, APIs, and integrations with existing legacy ERPs for continuity in operations.

Recently PayMate announced the launch of its B2B payments platform in the UAE that it believes will change the way in which businesses will manage their Accounts Payables and Accounts Receivables (AP & AR), in partnership with prominent financial institutions – Visa, a world leader in digital payments, and Citibank, a leading provider of global commercial card solutions. This partnership will enable unified settlement of corporate card payments directly into suppliers’ bank accounts.

Speaking on the company’s expansion into KSA, Ajay Adiseshann, Managing Director & Chairman, PayMate India Private Limited, says “We are going full steam ahead by offering our B2B payments platform in KSA after going live in UAE recently. The platform will provide end-to-end automation to its users which we believe will deliver the immediate benefits of our platform to these customers in terms of speed of payments and transparency over their cashflows and finances. Further, we believe that the adoption of the PayMate platform will add value to businesses who are facing regular payment delays.”

Additionally, PayMate has appointed Kevin Phalen, with experience in the global payments and financial services space, as an Independent Director, effective December 13, 2021. Kevin’s strategic insights will help the PayMate team in diverse areas including global expansion. Kevin has most recently worked at Visa Inc. (Visa) as their Head of Global Commercial Business and has experience in the payments industry.

On Kevin’s appointment, Ajay adds, “We are elated to have Kevin on-board at PayMate. Kevin’s experience will help us grow our global footprint and provide the PayMate B2B payments platform to a wider audience.”

Kevin Phalen further adds, “I am equally excited to join PayMate, one of the leading providers of financial technology solutions that digitize, automate and streamline B2B payments in supply chains and offers a cloud-based platform to customers for all their supply chain payments, statutory payments and bill payments. This is a booming sub-set of the overall payments industry in which PayMate, through its platform is offering supplementary avenues for businesses to use commercial cards and automate their end-to-end processes. Together, I am of the opinion, we will create a wider base of PayMate users across the globe.”

PayMate is a Visa certified Business Payment Solution Provider (BPSP) and is actively gearing up to offer its B2B payments platform and working capital offerings into other countries in CEMEA region in partnership with Visa and local Financial Institution partners. As of September 30, 2021, the PayMate platform is being used by more than 128,000 Indian businesses.

About PayMate

PayMate is one of the leading providers of financial technology solutions that digitize, automate, and streamline business to business payments in supply chains. The PayMate 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 South Asia (India) and UAE and is aiming to expand across CEMEA.