PhonePe Receives SEBI Approval for IPO

PhonePe, a significant player in digital payments backed by Walmart, has secured approval from the Securities and Exchange Board of India (SEBI) to move forward with its initial public offering (IPO). Sources familiar with the matter have confirmed this development. The Bengaluru-based firm initially submitted its Draft Red Herring Prospectus (DRHP) via a confidential route in September of the previous year. PhonePe is reportedly aiming to raise up to Rs 12,000 crore through this public offering.

Structure of the PhonePe IPO

The proposed IPO is primarily structured as an Offer for Sale (OFS), involving existing shareholders such as Walmart, Tiger Global, and Microsoft, among others. The anticipated listing could assign a valuation of approximately $15 billion to PhonePe. Startup Superb has sought additional information from PhonePe, and Moneycontrol was the first to report on this matter.

Recent Financial Highlights

PhonePe’s last funding round attracted $600 million through a secondary transaction led by General Atlantic. Additionally, a recent primary capital raise of $100 million occurred in May 2023, also spearheaded by General Atlantic, at a valuation of $12 billion.

PhonePe’s Market Position

In terms of operations, PhonePe has been solidifying its position within the UPI ecosystem. According to NPCI data, the company processed 9.8 billion customer-initiated transactions in December, amounting to Rs 13.61 lakh crore. The fintech company has also shifted its Pincode service from a B2C model to focus on B2B merchants, moving away from its original local commerce initiative launched on ONDC in April 2023.

Financial Performance

In the financial sector, PhonePe reported a remarkable 40.5% year-on-year growth in operating revenue, which increased to Rs 7,115 crore in FY25 from Rs 5,064 crore in FY24. Its adjusted profit, excluding ESOP costs, nearly quintupled to Rs 630 crore, compared to Rs 117 crore the previous year.