Paytm founder Vijay Shekhar Sharma. Photo: Supplied

While Paytm is scheduled to enter the capital markets next month, the digital payments major has hiked its issue size to 183 billion rupees (about US$2.5 billion) from the 166 billion rupee figure that was originally planned.

This is way above the previous biggest initial public offering of 154 billion rupees in India’s capital markets history by Coal India.

The increased portion will come from its offer-for-sale component with existing shareholders selling more of their shares. China’s Ant Group, the largest shareholder in Paytm, is likely to execute nearly 50% of its secondary share sale through the offer for sale component, the Economic Times reported.

The size of the primary offering will remain at 83 billion rupees, while the secondary size will now be 100 billion rupees. The shares of Paytm’s parent One 97 Communication will be listed in the Bombay Stock Exchange as well as National Stock Exchange.

With this sale, Ant’s stake in One97 will drop below 25%. According to the guidelines laid down by the Securities and Exchange Board of India, to be a professionally managed company, no single entity can hold more than a 25% stake in the company.

The other companies expected to execute offers for sale include Alibaba, SoftBank, Elevation Capital and other existing shareholders. Founder Vijay Shekhar Sharma, who now holds a 14.6% stake in the company, will also sell part of his stake during the offer for sale.

Media reports say the issue size was increased after Paytm had feedback that there was enough appetite for the company’s scrip.

Paytm recently received approval from the capital markets regulator for the public issue and is expected to file its red herring prospectus to incorporate the increase in issue size.

With Indian stock markets going through a buoyant phase, various privately held companies, including many new-age startups, have firmed up plans to go public and tap into the bullish market to fund their expansion plans.

Online beauty products seller Nykaa, edible oil manufacturer Adani Wilmar and health insurance firm Star Health & Allied Insurance have received the capital market regulator’s approval for initial share sales. Nykaa will start a share sale on October 28 and it aims to raise 53.5%

In July, food delivery startup Zomato netted $1.3 billion through its initial public offering. According to stock exchange data, the offer was oversubscribed 38 times, driven by strong institutional investor interest. It received bids for 27.5 billion shares against 719 million on offer.