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PhonePe Gets SEBI Approval for IPO

PhonePe Gets SEBI Approval for IPO, Plans Major Market Debut

Walmart-backed digital payments company PhonePe has received approval from the Securities and Exchange Board of India (SEBI) to launch its initial public offering (IPO), according to people aware of the matter. This brings the Bengaluru-based fintech a step closer to becoming one of India’s biggest new-age company listings. PhonePe had confidentially filed its draft red herring prospectus (DRHP) with SEBI in September last year under the pre-filing route. This method allows companies to take regulatory feedback before making financial details public. After receiving SEBI’s comments, the company is expected to upload its updated offer document on the regulator’s website soon. IPO size and structure The proposed IPO is expected to be mainly an offer for sale (OFS), meaning the company will not raise fresh capital. Instead, existing shareholders will sell part of their holdings. Sources said PhonePe may raise ₹11,000–12,000 crore through the issue. The company’s valuation at listing could reach around $15 billion, depending on market conditions. If launched at this level, the IPO would become the second-largest new-age technology listing in India, after Paytm’s ₹18,300-crore IPO in 2021. Shareholders likely to sell stake The OFS is expected to include shares from major investors such as Walmart, Tiger Global and Microsoft. Together, these shareholders may dilute around 10% of their total stake. PhonePe became a majority-owned subsidiary of Walmart after the US retail giant acquired Flipkart in 2018. The company was later separated from Flipkart in 2022, a move widely seen as preparation for a public listing. In the same year, PhonePe shifted its headquarters from Singapore to India. The move involved a one-time tax payment of nearly ₹8,000 crore, one of the largest such transitions by an Indian startup. Business overview Founded in 2015 by Sameer Nigam, Rahul Chari and Burzin Engineer, PhonePe is currently the largest player in India’s UPI payments market. The company holds close to 45% market share in UPI transactions, ahead of Google Pay’s estimated 35%. UPI now accounts for more than 85% of India’s digital payment volumes. PhonePe processes nearly 10 billion transactions every month, with total transaction value crossing ₹12 lakh crore. While digital payments form over 90% of its revenue, the company has expanded into other financial services such as:

  • Insurance distribution
  • Wealth management
  • Lending
  • Stockbroking through its platform Share.Market
It has also entered consumer technology with products like Pincode, a hyperlocal commerce app, and the Indus Appstore. PhonePe currently has more than 600 million registered users and serves nearly 50 million merchants across the country. Financial performance In FY25, PhonePe reported revenue of ₹7,148.6 crore, a growth of 41% compared with ₹5,064.1 crore in the previous year. The company is still loss-making, but losses have reduced. Its consolidated loss narrowed to ₹1,727.4 crore in FY25, compared with ₹1,996.2 crore in FY24, helped by better cost control and operating efficiency. PhonePe was last valued at about $12 billion during its 2023 funding round and has raised nearly $1 billion from investors including General Atlantic and Tiger Global. Comparison with listed fintech firms PhonePe’s IPO will place it alongside other listed fintech companies in India. · Paytm, listed in 2021, has seen its valuation fall to around $9.5 billion due to regulatory and profitability concerns. · PB Fintech, which runs Policybazaar, has performed better and is currently valued near $9 billion. · Groww, listed last year, has seen its valuation rise from about $7.5 billion at listing to nearly $10.5 billion. Market environment The approval comes at a time when IPO activity is picking up again, supported by strong domestic investor participation. Several startups, including Amagi Media Labs and Shadowfax, are preparing to list in the coming weeks. However, market volatility due to global interest rate uncertainty and geopolitical tensions has made companies more cautious about valuations. Against this backdrop, PhonePe’s strong position in digital payments, large user base and improving financial performance are expected to attract close attention as it moves toward one of India’s most important fintech IPOs. 

Disclaimer : This article is for informational purposes only and should not be considered as investment advice. Please consult your financial advisor before making any investment decisions. Investments are subject to market risks.