India’s popular payment app PhonePe is bringing its most awaited IPO to India. To capitalize on the rapidly growing fintech industry in the country, PhonePe is planning to launch its IPO soon. PhonePe is one of the most popular applications in India’s UPI market. In its last valuation, the company’s worth was estimated at USD 12 billion (~INR 1.04 lakh crore). PhonePe IPO could be the largest IPO in India’s fintech sector.
PhonePe IPO – Journey
PhonePe was launched in August 2016. Over time, the platform gained users’ interest and became India’s largest digital payment application. The company serves over 59 crore registered users and 4 crore merchants, providing them with easy payment facilities. You can understand the platform’s vastness from the fact that it processes 31 crore transactions daily, and its annualized total payment volume exceeds INR 145 lakh crore.
A crucial milestone came in December 2022 when PhonePe redomiciled from Singapore to India. This move, which carried a tax implication of INR 8,000 crore, signalled a clear intent for a domestic listing. To prepare, the company also restructured operations, setting up distinct subsidiaries for its non-payment businesses, and strengthening its financial position ahead of the IPO.
PhonePe IPO – Financial Performance and Growth
PhonePe’s financial growth has been strong, with notable improvements in revenue and profitability. Key highlights from its FY23-24 financial report:
- Revenue Surge: Revenue climbed 74% year-over-year, reaching INR 5,064 crore in FY23-24, up from INR 2,910 crore in FY22-23.
- Profitability: The company posted an adjusted profit after tax (PAT) of INR 197 crore in FY23-24, a major turnaround from a net loss of INR 738 crore the previous fiscal year.
- Payments Business Strength: PhonePe’s core payments division reported an adjusted PAT of INR 710 crore in FY23-24, recovering from a loss of INR 194 crore in FY22-23.
The fintech giant credits its improved financials to cost optimization and diversification into insurance broking, stock broking, and payment aggregation.
PhonePe IPO: Market Position and Expectations
With 48% of India’s UPI market share, PhonePe leads digital payments. Google Pay follows with 37%. While concerns about market share caps exist, analysts expect regulators to avoid disruptive actions given PhonePe’s widespread adoption.
Market reports are suggesting the IPO size could be minimum USD 1 billion (INR 8,300 crore). Final details such as offer size and timeline are not disclosed yet. However, the appointment of lead managers and underwriters is expected soon that is heightening anticipation.
Why the IPO Matters
For Walmart, the majority stakeholder, this IPO presents an opportunity to unlock value and strengthen its footprint in India’s digital finance sector. A successful listing would equip PhonePe with the capital to expand its services, intensify competition against Paytm and other fintech players, and fuel innovation.
CEO Sameer Nigam has previously stated that PhonePe would only go public after achieving sustained profitability. With its latest financial results confirming this milestone, the company appears well-positioned for a strong debut. Investors and industry experts are watching closely.
Final Thoughts
As PhonePe moves toward its IPO, its financial strength, market dominance, and strategic expansion make it a significant player in India’s fintech evolution. With Walmart’s backing and interest from global investors, this IPO could be a landmark event, reshaping the country’s digital payments landscape. The next steps in this journey will be closely monitored by investors, competitors, and regulators alike.
India’s fintech industry is growing at a rapid rate. One Mobikwik IPO is the most recent IPO from the industry which delivers 89.25% returns on the listing day. Paytm is the largest IPO from this industry which made its debut on 18 November 2021. However, Paytm IPO didn’t performs as the investors are expecting and closed in red with a loss of 27.44%.
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