New Delhi, March 6 (IANS). As PhonePe Ltd prepares for its initial public offering (IPO), its updated draft red herring prospectus (DRHP) highlights the sheer scale and monetization of the merchant ecosystem.
PhonePe is not a “free” service, but its merchant infrastructure has grown into a multi-billion revenue engine powered by 47 million businesses and millions of physical payment devices.
Data filed with the Securities and Exchange Board of India (SEBI) shows that PhonePe has reached almost the entire Indian market.
As of September 30, 2025, the number of registered merchants of PhonePe reached 47.19 million, covering 98.61 percent of all pin codes in India. By March 31, 2025, this base represents 77 percent to 80 percent of India’s total trade and services merchant population.
The number of monthly active merchants in March 2025 was 11.31 million, which was about 54 percent of all active UPI merchants in the country.
Daily active merchant engagement to increase from 44.18 percent in March 2023 to 60.77 percent by September 2025.
PhonePe’s physical footprint is a major driver of its subscription revenue. The 9.19 million devices currently deployed act as more than just payment tools; Smartspeakers serve as a communication medium, providing business updates and alerts to traders. This hardware network is maintained by a huge team of 25,657 team members and over 31,000 appointed agents, who are focused on expansion in rural areas.
The fastest growing area in DRHP is probably merchant lending. According to the IPO documents, PhonePe leverages the transaction data of its 47 million merchants to provide loans to partner lenders without any collateral.
Loan disbursement increased from Rs 0.11 billion in FY 2023 to Rs 45.07 billion in FY 2025. Loan income in the first half of FY 2026 alone has reached Rs 2,880.87 million, which is about 88 percent of the income of the entire previous year.
The merchant payments segment alone generated revenue of Rs 19,910.36 million in FY25, which is about 28 percent of PhonePe’s total operating income. With merchant total payment value (TPV) reaching Rs 15 trillion annually, the company has successfully transformed its vast payments network into a high-value financial services platform.
–IANS
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