NEW DELHI—The company behind Indian mobile-payment app Paytm plans to raise up to $2.2 billion through one of India’s largest-ever initial public offerings, capitalizing on a boom in the country’s stock market.

As part of the share sale by One97 Communications Ltd., some of its big-name backers—including Jack Ma’s financial-technology giant Ant Group Co. —will trim their holdings, a filing showed Friday.

The IPO has a maximum size of 166 billion rupees, the equivalent of $2.23 billion. According to research firm Prime Database Group, that would make it India’s largest-ever IPO in rupee terms—although not in dollar terms, since the rupee has depreciated over the last several years.

One97 is seeking to be valued at least $25 billion via its IPO, according to a person familiar with the matter. It was last valued at $16 billion based on a private investment in 2019. Subject to regulatory approval, the IPO could be launched within the next few months.

The offering will be split half and half between new shares and stock sold by existing shareholders, including Ant and its sister company Alibaba Group Holding Ltd. , Warren Buffett’s Berkshire Hathaway Inc., and funds linked to Japan’s SoftBank Group Corp.

Earlier this week, Zomato Ltd., India’s answer to DoorDash Inc., started taking orders for an up-to $1.3 billion IPO, and investors and bankers expect several other tech startups to come to the market in the months ahead.

One97 launched Paytm more than a decade ago, as a mobile-based digital-payments platform. It soared in popularity in 2016, after Prime Minister Narendra Modi canceled 86% of currency in circulation, in an attempt to tackle corruption. Millions of Indians downloaded Paytm to pay for everything from street food to auto-rickshaw rides, and soon it became India’s largest digital-wallet service.

As of March, the company’s users included 333 million consumers and more than 21.1 million merchants, the filing said. It handled transactions worth 4.03 trillion rupees, the equivalent of $54.1 billion, in the fiscal year to end-March. The company is unprofitable, and reported a restated total comprehensive loss of about 17 billion rupees for the same year.

In recent years, Paytm has faced stiff competition from newer entrants in payments like Alphabet Inc.’s Google Pay, and PhonePe, owned by Walmart-backed Flipkart, which have taken advantage of the state-backed Unified Payment Interface, a bank-to-bank payment system.

Paytm has expanded beyond payments into areas like personal loans, insurance, and e-commerce, where it has a platform known as Paytm Mall. It has also launched Paytm Money, through which investors can buy stocks and mutual funds. But so far none of these ventures has grown in the same way as its core offering. “None of them scaled like Paytm’s payments business,” said Satish Meena, an e-commerce analyst in Gurgaon.

Ant is One97’s largest shareholder with a 29.6% holding. It will sell a stake of about 5%, said the person familiar with the matter. Taking the biggest shareholder’s stake below 25% could help One97 comply with guidelines from the Securities & Exchange Board of India about companies it considers to be professionally managed, rather than controlled by a family or a so-called “promoter,” a term used in India to refer to the country’s powerful business leaders.

In less than six months, China’s tech giant Ant went from planning a blockbuster IPO to restructuring in response to pressure from the central bank. As the U.S. also takes aim at big tech, here’s how China is moving faster. Photo illustration: Sharon Shi

Write to Shefali Anand at [email protected]

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This post first appeared on wsj.com

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