Meesho undertakes third ESOP buyback worth $5.5 million

 Mumbai: Meesho is undertaking a $5.5-million ESOP buyback — its third so far — for all eligible current and former employees with vested stocks, even as it looks to build enough firepower to take on the likes of Amazon and Flipkart in India’s ecommerce market. The social commerce platform, which recently raised $570 million in a funding round led by Fidelity Management and B Capital Group, repurchased employee stock ownership plans worth $6 million in two previous rounds — $1 million in February 2020 and $5 million in November 2020 — with across-the-board participation. Separately, Google is in talks to invest in Meesho at a valuation of $4.9 billion, ETtech reported on Oct. 22. 

“We continue to see meteoric progress not only as a business but also in our efforts to democratise internet commerce for everyone,” Vidit Aatrey, founder and chief executive officer of Meesho said in a statement on Friday. “As we hire across the board and scale our tech and product talent by 2.5X, ESOPs will give employees high ownership, while providing more opportunities for wealth creation.” 

Meesho is among the several consumer internet startups that have recently undertaken ESOP buybacks worth a cumulative $545.8 million. These firms include Swiggy, Zomato, Unacademy, Razorpay, Moglix, Zetwerks, Zerodha, PhonePe, Udaan, Cred, Paytm, Acko and Licious. 

The abundance of ESOP buyback programmes has employees asking to be included in the pool upfront, even if the cash in hand is less to begin with, industry stakeholders had told ET previously.

Nykaa IPO subscribed 4.86 times

 

Retail investors, whose investments cannot exceed ₹2 lakh per individual, subscribed to 6.34 times the 4.73 million shares on offer, data showed. (Bloomberg)

Ravindra Sonavane

The institutional investor category was subscribed 4.77 times, while the non-institutional category comprising high-net-worth individuals was subscribed 418% or 4.18 times.

The initial public offering (IPO) of FSN E-Commerce Ventures Ltd, which owns Nykaa, was subscribed 4.86 times excluding the anchor book on Friday, the second day of the three-day offering.

As of 5 pm, the IPO received applications for 127.75 million shares against 26.28 million shares on offer, stock exchange data showed. The institutional investor category was subscribed 4.77 times, while the non-institutional category comprising high-net-worth individuals was subscribed 418% or 4.18 times.

Retail investors, whose investments cannot exceed ₹2 lakh per individual, subscribed to 6.34 times the 4.73 million shares on offer, data showed.

Separately, the Fino Payments Bank IPO was subscribed 51% on the first day of its three-day offering closing on 2 November.

The overall book, excluding the anchor allotment, was subscribed 0.51 times.

10 things to watch out for in Paytm's RHP as the company heads closer to its mega IPO

Paytm, India’s leading digital ecosystem for consumers and merchants, is headed for a public market debut — a much-awaited one as it is going to be the country’s largest IPO.

On October 22, the company received approval from SEBI for its IPO and it has now filed the Red Herring Prospectus.

Here are the ten things that stand out in the company’s RHP

1. Issue size increased: Paytm is headed for a Rs18,300cr IPO — the largest market debut in India yet. It had hiked its IPO issue size from the earlier Rs16,600cr as it received increased investor demand.

2. Paytm adoption goes up: Paytm, which has the country’s largest internet ecosystem as per Redseer, has seen its user base grow in the first three months of FY22. As per the company’s RHP, Paytm’s total user base has increased to 337 million registered consumers and over 21.8 million registered merchants, as of June 30, 2021. This is reflected in transacting users too - with the monthly transacting users going up to 57.4 mn, as of September 30, 2021 (a 33% YoY increase).

3. Big jump in revenue: For the three months ended June 2021, Paytm has seen a huge uptick in its revenues driven by its payments and financial services offerings. The company’s revenue is up by 46% to Rs9,480 million in Q1FY22, from Rs6,494 million in Q1FY21. Paytm’s losses stood at Rs3,819 million for the three months ended June 2021.

4. Payment and Financial services contribute to almost 80% of the revenue: Paytm’s bet in the financial services space has taken off as the payments and financial services vertical contributes to almost 80% of the company’s revenue.  As per the company’s RHP, for Q1FY22, the company’s payments and financial services revenue alone stood at Rs6,894 million.

5. Contribution margin goes up: Paytm’s contribution margin also rose significantly to 27.4% in Q1FY22, up from 14.9% in Q1FY21.

6. Bullish on GMV: Paytm GMV has increased from Rs697 billion in the three months ended June 30, 2020 to Rs1,469 billion in the three months ended June 30, 2021. The take rate, defined as ratio of the total revenue from operations to GMV, for the first quarter of FY 2022 was 0.61%, marginally lower compared to the previous quarter as COVID-19 affected the category mix of the company’s offline merchants (particularly with respect to offline devices subscriptions and MDR revenues) and commerce merchants.

7. Lending goes big: Paytm has been betting big on its lending vertical. And as per its RHP, it has taken off and how. The company in its RHP stated that in Q2FY22 it disbursed 2.84 million loans.

8. Merchants drive big numbers: Paytm merchant transactions have increased from 3.8 billion in FY 2019 to 5.2 billion in FY 2020, and to 5.9 billion in FY 2021, and from 1.0 billion in three months ended June 30, 2020 to 2.3 billion in the three months ended June 30, 2021. Revenue from payment services to merchants went up Rs1979 million in Q1FY21 to Rs3340 million in Q1FY22 

9. On a hiring spree: Paytm has grown its employee base as at the end of june 30, 2021 the company’s total on roll employee count stood at 10,266.

10. Expansion into international markets: While Paytm continues to innovate and provide better products and services to its consumers and merchants in India, the company believes there is a large opportunity to leverage its technology infrastructure and expand to international markets. In 2017, it piloted the bill payment services in Canada and in 2018, it partnered with Softbank Corp. and Yahoo Japan Corporation to launch PayPay, a leading digital payments and financial services company in Japan. Paytm continues to explore international opportunities, especially in the developed markets, where it can either launch its merchant services, or collaborate with partners to launch consumer facing platforms. 

Nykaa IPO opens today for subscription; Garners Rs2,396cr from anchor investors

The company in consultation with merchant bankers has finalised allocation of 21,296,397 equity shares to anchor investors, at Rs1,125 per share, the upper end of the price band, as per a BSE circular.

FSN E-Commerce Ventures Limited – Nykaa on Wednesday has mopped up Rs2,396cr from 174 anchor investors ahead of its initial public offering. The offer will open for subscription on October 28.

The company in consultation with merchant bankers has finalised allocation of 21,296,397 equity shares to anchor investors, at Rs1,125 per share, the upper end of the price band, as per a BSE circular.

BlackRock Global Funds, Fidelity Funds, Nomura, Government of Singapore, Monetary Authority of Singapore, Canada Pension Plan Investment Board, T Rowe Price, Tiger Global Investments Fund, Goldman Sachs and Morgan Stanley are among the investors that participated in the anchor book.

The Price Band of the offer has been fixed at Rs1,085 to Rs1,125 per Equity Share.

The bids can be made for a minimum of 12 Equity Shares and in multiples of 12 Equity Shares thereafter.

The Equity Shares offered through Red Herring Prospectus are proposed to be listed on BSE and NSE.

The offer includes a reservation of up to 250,000 Equity Shares for purchase by eligible employees (“Employee Reservation Portion”).

Snapdeal Shows The Way With Speedy ODR

New Delhi: Digital payments and financial services firm Paytm on Monday said it  ..

Read more atThe Indian government and the judiciary are also encouraging the adoption of the ODR mechanism. Earlier this year in April, NITI Aayog launched the first-of-its-kind Online Dispute Resolution (ODR) handbook that highlights the types of ODR models that companies can use. ODR initiatives have also found acceptance in the US, Canada, and Europe. The United Nations Commission on International Trade Law (UNCITRAL) also conducts training sessions on ODR.The Indian e-commerce market has witnessed exponential growth in recent years, and it is expected to grow further. According to the statistics published by the London-based data and analytics company, GlobalData, India’s e-commerce sales will reach US$ 120.1 billion by 2025, growing by 18% annually from 2021 onwards.

This growth is visible through the millions of products that get bought and sold across the country every day. Data released by the Department of Consumer Affairs (DCA), Ministry of Consumer Affairs, shows that as shoppers rapidly migrate to online platforms, there has been an increase in consumer disputes about e-commerce. In the last four years, nearly 22% of all consumer grievances in India were related to the e-commerce sector.

While consumer grievances are handled expeditiously by most e-commerce platforms, a small proportion of residual cases may remain intractable. Some of these cases head towards India’s courts, where they can take years as they wind their way through the judicial system.

Snapdeal believes that in a progressive online ecosystem, the process of resolving any outstanding disputes should be as simple and as fast as the process of making an online purchase.

The Snapdeal way

Using the pandemic-related disruption as the trigger, Snapdeal has started using “Online Dispute Resolution" (ODR) - to make resolutions tech-enabled, easy, and fast.

To enable this, Snapdeal roped in Sama, an online dispute resolution (ODR) specialist, who resolves disputes faster and more cost-efficiently with the help of technology and a network of highly skilled professionals.

As part of this initiative, Snapdeal launched a pilot project with Sama Suljhao Manch, to resolve pending consumer disputes. The results of the pilot highlight the role that technology and processes can play in reducing delays and facilitating win-win outcomes for all stakeholders.

Nearly 240 cases, where consumers expressed their interest in exploring a reconciliation process, were covered under the project. Of these, a comprehensive dispute resolution was achieved in nearly 130 cases, thus achieving a 54% success rate. Cases that usually take up to three years to resolve, were settled by the Sama Suljhao Manch within 15 days!

The ODR process brought both sides to the negotiation table through an online mediation services platform with the help of an expert neutral conciliator. Empowered with reconciliatory powers under the Indian Arbitration and Conciliation Act, 1996, the conciliator persuaded concerned parties to arrive at mutually agreeable terms that are legally binding to both parties. This way, Sama succeeded in resolving several consumer disputes amicably and quickly.

Besides accelerating the settlement process, the exercise also delivered an additional benefit to Snapdeal in terms of building stronger relationships with its users. According to Snapdeal’s General Counsel, Smriti Subramanian, “Snapdeal’s users appreciate our proactive approach in resolving matters. They also recognise that our approach to the issues is not adversarial but is in fact both collaborative and adaptive. As a responsible e-commerce player with strong social and governance policies, placing the user first has always been Snapdeal’s endeavour."

ODR is the way forward