Paytm has sent notice to all the shareholders regarding conducting of Extra-ordinary General Meeting (“EGM”)  on Monday, July 12, 2021. The following decisions will be made and finalized in the meeting. 1. To consider and approve raising of capital through an IPO of equity shares. They are planning for an IPO consisting of Fresh Issue of Shares worth Rs.12000 Crores and OFS (Offered for Sale). 2. Company is also looking for a Pre-IPO placement of Paytm Shares. The size is not yet disclosed. 3. To consider and approve declassification of Mr. Vijay Shekhar Sharma from his status as promoter of the Company. What does that mean for Paytm? As per SEBI regulation for an IPO, the promoter of the company should have minimum 20% shareholding. However, Vijay Shekhar Sharma is holding shares less than 20%, so Paytm board has decided to remove the tag of "Promoter" before IPO. However, the good news is, Paytm is looking for to get PMC (Professionally Managed Company) status. PMC status has to be approved by SEBI. If that happens, Paytm will get good valuation as PMC companies are considered to be well managed as compared to promoter driven companies. How to get PMC Status? As per SEBI, to get PMC status, the single shareholder in the company should not have more than 25% stakes. Let us see the shareholding pattern of Paytm. Ant Group = 30.33% Alibaba = 7.32% Softbank = 18.73% Vijay Shekhar = 14.97% Elevation Capital = 17.65% Others = 11% So, to get PMC status Ant Group has to reduce the shareholding below 25%. Paytm EGM Notice