Paytm IPO: Where BlackRock sees value in India’s biggest IPO

Paytm IPO: What exactly do the likes of BlackRock Inc. and Canada Pension Plan Investment Board see in the unprofitable Indian payments startup heading for the country’s biggest-ever initial public offering? A simple answer: the raw power of data. Paytm, formally known as One97 Communications Ltd., has signed up BlackRock, the world’s largest asset manager, and CPPIB together with the sovereign wealth funds of Singapore and Abu Dhabi as anchor investors for the 183 billion rupee ($2.46 billion) IPO that opens Monday. The $1.1 billion sale to cornerstone investors saw more than 10 times as much demand as shares on offer, according to Bloomberg News.

The Indian online-payment pioneer had tremendous novelty value five years ago. When Prime Minister Narendra Modi suddenly immobilized 86% of the country’s currency in November 2016 in a failed bid to freeze out ill-gotten cash, the fledgling app, whose name is shorthand for “pay through mobile,” won millions of new customers overnight. Founder Vijay Shekhar Sharma couldn’t hide his glee. Warren Buffett’s Berkshire Hathaway Inc. joined Masayoshi Son’s SoftBank Group Corp. and Alibaba Group Holding Ltd. as investors in the startup.