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Also in this letter:
■ Flipkart appoints Nandita Sinha as new Myntra CEO
■ Nykaa, Zomato shares scale all-time highs
■ Biden tightens US restrictions on Huawei, ZTE
Paytm prices stock at top of range in Rs 18,3000 crore IPO
Paytm has priced its shares at the top of the range for its Rs 18,300 crore initial public offering (IPO), according to the final prospectus it filed with the Registrar of Companies today, even though India’s largest public issue was received with less enthusiasm than those of other tech firms.
The company priced its share issue at Rs 2,150 each. It had flagged a price range of Rs 2,080-2,150 per share for the deal, valuing the company at Rs 1.39 lakh crore at the upper end.
Tell me more: The company’s document also shared a preview of the fees paid to legal partners, book running lead managers (BRLMs) and other advisors for its IPO.
According to the prospectus, Paytm will pay its BRLMs Rs 323.9 crore, which is about 1.8% of the total issue size of Rs 18,300 crore and among the largest ever cumulative BRLM payouts in India.
Paytm had appointed Morgan Stanley, Goldman Sachs, Axis Capital, ICICI Securities, JP Morgan, Citi, and HDFC Bank as its BRLMs for the IPO.
Mega IPO: Paytm’s Rs 18,300-crore offering, open for subscription from November 8 to 10, was oversubscribed 1.89 times, with investors placing 9.14 crore bids for the 4.84 crore shares on offer.
It was the largest fintech IPO in the Asia Pacific region and the second-largest fintech IPO of 2021 globally, after Spain’s Allfunds IPO.
350 new crorepatis: Meanwhile, about 350 current and former Paytm employees will each have a net worth of at least Rs 1 crore after Paytm’s IPO, a source in the company told Reuters. Many, like Siddharth Pandey, an electronics engineer from UP, will become dollar millionaires when the company lists next week.
Pandey, who is now 39, is no longer with the company, but said his seven-year stint at Paytm left him with tens of thousands of shares.
He declined to give details, but the shares were priced at Rs 2,150 ($28.9) apiece on Friday. Pandey said he would be worth more than $1 million (Rs 7.44 crore).
He said that when he joined the company in 2013, his father was “very demotivating”, saying, “What is this Paytime?! “‘For once work in a company people know about.”
“Now he (my father) is obviously very happy. He has just asked me to stay grounded,” Pandey said.
Flipkart appoints Nandita Sinha as new Myntra CEO
Nandita Sinha will move to her new role from January 1, 2022
Flipkart-owned fashion portal Myntra has appointed Nandita Sinha as its new chief executive officer to replace outgoing CEO Amar Nagaram, according to people briefed on the matter. This is also the first time a woman executive will hold this position in the ecommerce group.
Sinha will move to her new role from January 1, 2022.
The rejig: As reported by ET earlier, Nagaram is leaving Myntra to start his own venture but will stay with the company until the end of December. Sinha’s replacement at Flipkart is yet to be finalised. Nagaram was with Flipkart for almost seven years before moving to Myntra as its CEO in 2019.
About the new CEO: Sinha has been with Flipkart since 2013 and most recently was the VP for customer growth, media and engagement. She has also been actively engaged with Flipkart’s flagship Diwali sale event, Big Billion Days, and is said to be a close aide of Flipkart Group CEO Kalyan Krishnamurthy.
In a statement, Krishnamurthy said Myntra is integral to the group.
- “As the forerunner of several innovations and unique consumer experiences, our aspirations continue to grow for Myntra as a separate company. I am certain that with her strong background in driving businesses and an acute focus on customer-centricity, Nandita will be instrumental in defining the next phase of Myntra’s evolution as its CEO,” he said.
Increasing competition: Myntra is seeing increased competition, with Reliance Industries’ fashion portal Ajio cornering market share and challenging Myntra’s leadership position, as reported by ET.
Myntra has been widening its offerings in segments such as beauty and personal care, besides experimenting with influencer-led live commerce shopping. We reported earlier this month that it had started testing influencer-led live online shopping, becoming one of the first major ecommerce platforms in India to experiment with the model, which has been a success in China.
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Nykaa, Zomato scale all-time highs on sustained investor interest
Shares of Zomato and Nykaa’s parent FSN E-Commerce Ventures rose to all-time highs today, indicating the continued investor interest that the consumer internet firms have garnered since listing. While Zomato listed on July 23, Nykaa did so on November 10.
Nykaa: Shares of FSN E-Commerce Ventures rose as much as 8.73% intraday to an all-time high of Rs 2,409.95 apiece on BSE before ending the day 6.44% higher at Rs 2,358.90. To be sure, this was only the third trading session for India’s biggest cosmetics etailer. The company had a market cap of Rs 1,11,558.80 crore.
Zomato: The food delivery firm’s stock gained 10.08% intraday to hit Rs 155 after its scrip was included in the MSCI India Index. The stock pared some of the gains but still ended the trading session at an all-time high of Rs 153.30 — or 8.88% higher than the previous close.
- The MSCI Index is designed to measure the performance of the large and midcap segments of the Indian market. With 101 constituents, it covers about 85% of the Indian equity universe.
Bumper listings: Nykaa had made a strong market debut on Wednesday, with its shares priced at Rs 2,207 on the BSE at the end of the day — a 96% premium over its issue price of Rs 1,125 a share.
Zomato, the first consumer internet company to list in India, had made a stellar debut on Dalal Street on July 23, when the stock opened at Rs 116 on the NSE, 52.63% higher than its offer price of Rs 76. On BSE it was at Rs 115, up 51.32%.
Biden tightens US restrictions on Huawei, ZTE
US President Joe Biden on Thursday signed legislation to prevent companies like Huawei Technologies Co or ZTE Corp that are deemed security threats from receiving new equipment licenses from US regulators.
The Secure Equipment Act, the latest effort by the US government to crack down on Chinese telecom and tech companies, was approved unanimously by the US Senate on October 28 and earlier in the month by the US House on a 420-4 vote.
The timing: The signing comes days before Biden and Chinese leader Xi Jinping are expected to hold a virtual summit. The meeting is expected Monday, amid tensions over trade, human rights and military activities.
The new law requires the Federal Communications Commission (FCC) to no longer review or approve any authorisation application for equipment that poses an unacceptable risk to national security.
FCC Commissioner Brendan Carr said the commission has approved more than 3,000 applications from Huawei since 2018. The law “will help to ensure that insecure gear from companies like Huawei and ZTE can no longer be inserted into America’s communications networks,” Carr said.
Tell me more: In March, the FCC designated five Chinese companies as posing a threat to national security under a 2019 law aimed at protecting US communications networks. The named companies included previously designated Huawei and ZTE, as well as Hytera Communications Corp, Hangzhou Hikvision Digital Technology Co and Zhejiang Dahua Technology Co.
The FCC in June voted unanimously to advance a plan to ban approvals for equipment in US telecommunications networks from those Chinese companies even as lawmakers pursued legislation to mandate it.
The FCC vote in June drew opposition from Beijing.
- “The United States, without any evidence, still abuses national security and state power to suppress Chinese companies,” Zhao Lijian, a spokesperson at China’s foreign ministry, said in June.
Under proposed rules that won initial approval in June, the FCC could also revoke prior equipment authorisations issued to Chinese companies.
Foxconn sees Q4 revenue slumping on chip supply shortage
Taiwan’s Foxconn, which assembles iPhones for Apple, said today it expected revenue from its key smartphone business to slide more than 15% in the quarter ending December, hurt by the ongoing global shortage of components.
Speaking during a conference call after the world’s largest contract electronics maker reported a 20% profit jump for July-September, Chairman Liu Young-way said the company was cautious about its 2022 revenue outlook, citing uncertainties surrounding the coronavirus pandemic, inflation, geopolitical tensions and supply chains.
- “If not for supply shortages” the company’s fourth-quarter revenue outlook could have been better, he said.
Foxconn said it expected overall company fourth-quarter revenue to fall between 3% and 15% in the period.
Q3 results: The outlook came after a strong third quarter, in which revenue rose 9% on the year, helped by strong smartphone demand as people continue to work remotely. Net profit jumped to T$36.98 billion ($1.33 billion), beating a Refinitiv consensus estimate of T$31.73 billion.
Analysts had said they expected robust iPhone sales to boost Foxconn’s business in the third quarter, and the company secured more than 75% of assembly orders, including those for the latest iPhone 13. But they cautioned that supply chain problems could mute any further near-term increase in orders at Foxconn.
Today’s ETtech Top 5 newsletter was curated by Arun Padmanabhan in New Delhi and Zaheer Merchant in Mumbai.
