Razorpay: Preparing for Initial Public Offering

Razorpay, a leading player in digital payments, has reportedly commenced preparations for an initial public offering (IPO), with plans to secure up to Rs 4,500 crore ($505 million) in new funding. As per a report from Economic Times, the Bengaluru-based firm has solicited proposals from merchant bankers for the IPO mandate, with Kotak Mahindra Capital and Axis Capital emerging as prominent contenders.

IPO Timeline and Funding Insights

The IPO is anticipated to be launched towards the end of the year, though the exact timeline and issue size remain undecided. The report also mentioned that Razorpay is currently engaged in discussions regarding a pre-IPO funding round, which is expected to be predominantly secondary in nature.

Company Valuation and Growth

In 2021, Razorpay achieved a valuation of $7.5 billion, following a substantial $375 million funding round during the height of the funding cycle. Startup Superb has reached out to Razorpay for further comments on the situation.

Corporate Developments

In April of last year, Razorpay transitioned to a public limited company, a development first reported by Startup Superb. That same year, the fintech unicorn completed its reverse flip to India, resulting in approximately $150 million paid in taxes associated with the move.

Recent Acquisitions and Licenses

In a notable recent turn of events, Razorpay acquired a majority stake in POP UPI for $30 million. Moreover, the company successfully obtained a cross-border payment aggregator licence from the Reserve Bank of India.

Funding and Financial Performance

Co-founded by Harshil Mathur and Shashank Kumar, Razorpay has secured over $741 million in funding, with prominent investors including GIC, Peak XV Partners, Z47 (previously known as Matrix Partners India), and Tiger Global.

On the financial side, Razorpay reported a remarkable 65% year-on-year increase in consolidated revenue, amounting to Rs 3,783 crore for FY25. This growth was driven by impressive performance across its payment gateway, banking, POS, and international operations, as stated by the company. Additionally, the gross profit rose by 41% to Rs 1,277 crore, although a net loss was reported due to ESOP-related expenses amounting to Rs 1,209 crore and one-off costs related to its redomiciling.