The fintech space is preparing for another big public offering – PhonePe. While anticipation is building on when the issue will be launched, the brokerage firm Macquarie Research in its latest report has shared its outlook on the proposed initial public offering. They believe that PhonePe’s listing could lead to near-term re-rating for Paytm.
Are you wondering why? Let’s take a look at how the brokerage rates the upcoming PhonePe IPO and its impact on the fintech segment.
Macquarie on PhonePe: A $15 billion listing in the making?
According to the brokerage report, “PhonePe – one of India’s largest Fintech company in the payments space is looking to list at a valuation of $15 billion.”
PhonePe recently filed its Draft Red Herring Prospectus, the preliminary document required before launching an initial public offering. As per the brokerage report, the company is among the largest fintech players in India and holds over 45% market share in Unified Payments Interface transactions.
Unified Payments Interface is India’s instant digital payments system, and PhonePe operates as a Third Party Application Provider under this framework.
Macquarie on PhonePe: Rising competition for Paytm
A key focus area in the report is PhonePe’s rapid expansion in financial services distribution. This includes selling loans, insurance and mutual funds through its app.
According to the brokerage report, the share of this business in total revenues has increased from 4% in FY24 to 13% in the first half of FY26.
The brokerage report further noted, “Implications for Paytm from Phone Pe’s listing – More competition in distribution business and near term re-rating depending on valuation.”
Since nearly one-third of Paytm’s revenue comes from distribution of financial services, stronger competition from PhonePe could put pressure on margins.
The brokerage also pointed out that PhonePe’s latest valuation, based on previous transactions and media reports, is about $13–15 billion.
This is estimated to be 60-90% higher than Paytm’s current market capitalisation, despite PhonePe being EBITDA negative while Paytm has turned positive on this metric.
Macquarie on PhonePe: Revenue risks and regulatory hurdles
The brokerage house also flagged regulatory risks in its report. According to the brokerage report, “PhonePe’s current revenues could be affected by ~20-25% due to change in regulations as per the DRHP.”
The report noted, “As of H1FY26, closer to ~19% of revenues comes from rent (rent payments through credit card which has been discontinued by RBI), RMG (real money gaming) and PIDF (RBI’s payment infrastructure development fund) incentives which have been discontinued/restricted.” The Reserve Bank of India, the country’s central bank, has either restricted or discontinued some of these categories, which could impact earnings.
Dependence on government incentives linked to Unified Payments Interface transactions is another factor. According to the brokerage report, such incentives account for about 6% of PhonePe’s revenues compared to around 2% for Paytm.
In addition to this, the National Payments Corporation of India has proposed capping Unified Payments Interface market share at 30% per player by December 31, 2026.
PhonePe Vs Paytm: Macquarie compares valuation
Macquarie draws a sharp comparison between the two fintech players. According to the brokerage report, at a valuation of $13-15 billion, PhonePe would trade at 37-43 times its adjusted revenues for the first half of FY26. In contrast, Paytm trades at around 19 times similar metrics.
Conclusion
Overall, the report suggests that PhonePe’s IPO will not just test investor appetite for fintech stocks but could also reshape valuations across the sector.