🤑 India's biggest IPO ever!!!

Paytm plans to launch its IPO, India's bond returns best in Asia, Open AI launches new startup fund, and some more updates.

May 27, 2021

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Read Time: 842 words, 4:13 minutes.

There’s so much to cover today so let’s get started.

First up,

Market Snapshot 📈

Sensex: 51,115.22 (+0.19%) ↑

Nifty 50: 15,337.85 (+0.24%) ↑

Dow Jones: 34,323.05 (+0.031%) ↑

Nasdaq 100: 13,702.74 (+0.33%) ↑

Bitcoin: $39,544.35

Top Stories 📰

1. Paytm targets $3 billion IPO 💰

Paytm is planning to go public this Diwali in what could be the biggest IPO India has ever seen.

The digital payments platform, officially known as One97 Communications Ltd., is aiming to raise 218 billion rupees at a $25-$30 billion valuation. JPMorgan Chase & Co., Morgan Stanley, and Citigroup are contending to run the offering, with Morgan Stanley leading for the role.

Paytm's listing will include new and existing shares required to meet India's regulatory obligations, which mandates 10% of shares to be floated within two years and 25% within five years.

If Paytm successfully launches IPO, its initial share sale would surpass Coal India's offering, which holds the record for India's largest IPO raised at over 150 billion rupees in 2010.

Paytm is India's leading payment platform, with over 20 million merchant partners and 1.4 billion monthly transactions. The Bangalore-based startup is backed by big players, including SoftBank Group, Berkshire Hathaway, and Ant Group. It also handles the Unified Payments Interface (UPI), which is India’s financial payments backbone.

Why it matters? Since last year, Paytm has been aggressively trying to ramp up its revenue and monetize services. The company has also expanded its operations into financial services, wealth management, banking, credit cards, and digital wallets.

2. India beats Asian peers in bond returns 📊

This month, India's dollar bond returns have outperformed in major Asian credit markets despite its economy suffering amid the pandemic.

According to Bloomberg, India's dollar bond reported a 0.8% gain this month — the highest in Asia — followed by Singapore and Hong Kong, which advanced 0.64% and 0.59%, respectively. Meanwhile, China and South Korea were the worst performers this month.

India's dollar bond risk also dropped as rating firms downplayed the credit impact of coronavirus after the record surge in cases dragged down India's strong rally last month. Additionally, some believe that the Finance Ministry's recent announcement of the stimulus package for sectors worst affected by the pandemic will reinforce India's credit.

These gains come in the backdrop of India's worsening COVID-19 crisis as vaccine shortages restricted travel and imposed closures of manufacturing units, forcing companies to divert operations abroad. In the last 24 hours alone, India reported 211,298 new infections, with deaths exceeding 3,847.

Why it matters? While bond markets are performing well in most of Asia, some countries like China face record bond defaults as one of its biggest banks now owes $41 billion in bond payments to domestic and international bondholders.

3. Today's big deals 🎉

OpenAI announces $100 million AI startup fund
OpenAI has launched a $100 million OpenAI Startup Fund to “help AI companies have a profound, positive impact on the world." The fund will be managed by OpenAI and has received investments from Microsoft, among other investors. OpenAI founder Sam Altman said that the fund will partner with early-stage AI companies that are tackling issues relating to climate change, education, and healthcare. The selected companies will receive access to OpenAI's latest systems along with Microsoft's Azure resources. The fund will also finance productivity companies that use OpenAI’s massive GPT-3 natural language model that Microsoft introduced yesterday. In 2019, Microsoft first invested $1 billion in OpenAI to develop artificial general intelligence (AGI).
Anti-cancer drugs firm Engine Biosciences raises Series A
Engine Biosciences, a company that detects errors in the complex genetic codes of diseases and fixes them with precise therapeutic solutions, has raised $43 million in Series A funding round. Led by Polaris Partners, the round saw participation from new investors like Invus, and existing investors, including Baidu Ventures, 6 Dimensions Capital, and DHVC. So far, the company has raised $53 million in capital, which includes the $10 million it raised in seed round back in 2018. Engine Biosciences is currently focused on developing anti-cancer drugs but hopes to diversify its application to other diseases. The company will use the money towards building the necessary paperwork and testing required before introducing a new drug in the market.