PhonePe, the most used platform for digital payments in the country, is preparing to launch an IPO. The IPO size could range between ₹11,000-13,000 (approximately $1.2-1.5 billion). This could increase the company’s valuation to $10-12 billion.
In 2023, the company raised $100 million at a pre-money valuation of $12 billion under the leadership of its Founder and CEO Sameer Nigam. Currently, Walmart has the largest stake in PhonePe. Other investors include Microsoft, General Atlantic, Tiger Global, TVS Capital, Qatar Investment Authority, Tencent and Ribbit Capital.
According to the company’s IPO filing, Walmart will reduce its stake in PhonePe by about 12% through this IPO. Meanwhile, Tiger Global and Microsoft are planning to exit their investments completely. The three investors are planning to sell about 50.7 million shares in the IPO. Therefore, the IPO is expected to be entirely an offer-for-sale (OFS). This means that PhonePe will not issue new shares.
The country’s second largest fintech IPO!
In India’s rapidly growing digital payments market, PhonePe competes directly with Google Pay and Paytm. The company applied for its IPO in September and is expected to complete its listing by April this year. However, rising tensions in the Middle East may impact the timeline. If the listing goes ahead, PhonePe will become India’s second largest fintech IPO. Earlier, in 2021, Paytm had launched an IPO worth ₹18,300 crore.
UPI was launched in 2016
Currently, PhonePe has more than 650 million registered users. According to regulatory data, in January, out of the total 21.7 billion transactions processed through Unified Payments Interface (UPI) across the country, about 10 billion were processed through it. To promote digital payments in the country and reduce the use of cash, the government launched UPI in 2016. Digital payments in India are still a low-margin business as companies are not allowed to charge fees for most transactions.