PhonePe is likely to open its initial public offering next month, contingent on how the currently tense geopolitical situation unfolds
It is likely to raise between $900 Mn to $1.5 Bn through the public listing at a valuation of $900 to $1.5 Bn
As losses continue to mount, analysts are skeptical about PhonePe’s ability to monetise from its lead in the UPI market
Fintech major PhonePe is planning to open its IPO by next month, contingent on how the currently tense geopolitical situation unfolds.
Citing sources, Reuters reported that the Bengaluru-based startup is likely to raise between $900 Mn to $1.5 Bn through the public listing, which only has an offer-for-sale component. The IPO will value PhonePe between $900 Mn to $10.5 Bn – lower than the $12 Bn valuation at which it last raised $100 Mn in equity funding in 2023.
Overall, the startup has raised nearly $2.3 Bn to date.
Notably, PhonePe is not raising new funds through the IPO and only providing exit liquidity to selling shareholders, including its parent entity Walmart.
Walmart is trimming its stake by approximately 12% by selling 5.06 Cr equity shares from its 71.77% holding in the startup. It will continue to remain the majority shareholder, with other selling investors Tiger Global and Microsoft holding less than 1% stake each.
Tiger Global and Microsoft are exiting their entire position in PhonePe, while others like General Atlantic Singapore, Headstand Pte Ltd and 3State Ventures have decided to remain on the cap table, according to the startup’s updated DRHP filed in January.
PhonePe filed confidential draft papers in September last year after converting into a public company. Following its listing, it will join fintechs like PB Fintech, Groww, and its biggest rival Paytm on the bourses.
PhonePe Yet To Post Profit
However, the gap between the two rivals has widened significantly since Paytm went public in 2020, when it used to be the market leader. Now, PhonePe has gobbled up almost half the UPI payments market in India with a 46.6% share in January. However, concerns remain its ability to monetise its offerings.
The fintech startup’s loss widened 20% YoY to ₹1,444 Cr in the first half of the current financial year, while operating revenue rose 22% to ₹3,918.5 Cr. The startup is looking to diversify beyond low-margin UPI payments. Consumer and merchant payments made up for 63.8% and 21.8% of its total revenue mix in H1 FY26, respectively. Lending and insurance distribution, in comparison, only contributed 6.3% of its total revenue in H1 FY26.
Analysts have pointed out that the merchant payment layer is likely to be far more lucrative than consumer payment offerings, especially as the former provides better monetisation streams like platform fees, lending, EMI partnerships and device-led offline expansion. While Paytm has already decided to hinge the next phase of growth on this vertical, PhonePe is slowly catching up.
As it heads to public markets, all eyes will be on PhonePe’s ability to turn profitable while proving differentiation from its peers.
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