Prosus-owned fintech giant PayU is looking to raise up to USD 300 million (~INR 2,640 crore) by selling a minority stake, a crucial step towards its long awaited IPO. The deal is in its early stages and is being structured with the help of investment bank HSBC, according to industry reports.
Fundraise to Set Benchmark for IPO
PayU’s stake sale is designed to test investor appetite and set a valuation benchmark before the IPO. Sources indicate the company is looking to raise USD 250-300 million (~INR 2,640 crore) and the proceeds will be used to diversify PayU’s shareholder base and strengthen its balance sheet as it builds governance structures and gets ready for public markets.
This comes after Prosus (PayU’s Dutch parent) invested over INR 1,300 crore (~USD 155 million) this year alone in PayU’s credit business, showing continued faith in India’s fintech story. Notably, in March 2025, PayU also acquired 43.5% stake in Mindgate Solutions, a major UPI technology infrastructure provider to leading Indian banks.
Business Model
Founded in 2002 and spun out of Ibibo in 2014, PayU has grown into one of India’s most trusted digital payment providers, serving over 5,00,000 merchants. Its payment gateway supports cards, UPI, net banking, wallets, EMIs, and QR codes, and offers enterprise-grade features like fraud protection, tokenization, split payments and AI-driven analytics.
On the lending side, the company has an RBI approved NBFC license and offers instant credit, BNPL (buy now pay later) and EMI solutions for underserved consumer and SME segments. Its lending business has been boosted by Prosus’ recent capital infusion and is becoming increasingly central to its growth story.
Financials
For FY25, the companys revenue grew 21% to USD 669 million (~INR 5,890 crore), with payments business growing 12% to USD 498 million (~INR 4,987 crore). Credit business grew 60-63% to USD 171 million (~INR 1,506 crore) with USD 1.1 billion (~INR 9,700 crore) in loan disbursements. But profitability remains elusive, with the company reporting an adjusted EBIT loss of USD 44 million (~INR 387.64 crore) in FY25, up from USD 32 million (~INR 281.9 crore) in FY24.
The losses are due to higher credit risks and aggressive growth, even as the payments business was profitable in H2 FY25. To mitigate risks, the company has tightened underwriting standards and is focusing on small business lending and strategic partnerships.
PayU IPO Timeline and Strategy
PayU IPO has been delayed multiple times. Initially planned for late 2023, then 2025, now it’s firmly scheduled for FY26. Prosus executives have repeatedly said that operational performance takes priority over rushing to market.
So the upcoming fundraise is both a test of investor appetite and a signal that PayU is serious about building governance and financial discipline before the IPO.
Even as it prepares for the IPO, PayU continues to expand its ecosystem. Just last month, Connester SB Global Tech, a DPIIT-recognized startup, integrated PayU as its official payment gateway to power secure transactions on its networking platform. Such partnerships highlight PayU’s strategy of embedding its payment solutions across diverse digital ecosystems, reinforcing both brand trust and transaction volume.
Outlook
With half a million merchants, a fast-scaling lending book, and RBI approval to operate as a regulated payment aggregator, PayU is strategically positioned at the heart of India’s digital finance revolution. Yet, profitability challenges and heightened regulatory scrutiny remain hurdles.
As it moves toward pre-IPO fundraise, the company faces a balancing act: fueling growth without deepening losses, while convincing investors of its long-term sustainability.
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