Walmart-owned PhonePe on Wednesday said it has confidentially pre-filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), joining a string of startups that have filed papers to go public this year.
According to sources, the company could be looking to raise around Rs 12,000 crore through the offer for sale (OFS) route.
Startups, including Meesho, Pine Labs, Groww, PhysicsWallah, Wakefit, Curefoods, Shiprocket and Shadowfax have already filed their IPO papers, with several of these filings made confidentially.
Recent listings included managed office space provider IndiQube and home services platform Urban Company, which saw its IPO subscribed as much as 109 times.
Market leadership and financial strength
PhonePe has been enjoying the leading position among the Unified Payments Interface (UPI) players. In terms of volume, its market share was 46% in August, while that of its closest competitor, Google Pay, was 35%, according to data from the National Payments Corporation of India (NPCI). The firm turned free cash flow-positive in FY25, sources said, with cash flow from operations at Rs 1,202 crore. Adjusted Ebitda (excluding Esop cost) also more than doubled to Rs 1,477 crore.
Among other revenue sources, the company earns transaction processing fees from consumers, who use the app to make bill payments, recharge, and use other ticketing services, as well as from merchants for facilitating their online and offline payments. PhonePe also charges a set-up and subscription fee on the point of sale (PoS) payment devices it offers to merchants.
Earlier this week, PhonePe reported a 40% year-on-year rise in revenue from operations to Rs 7,114.9 crore in the financial year ended March 2025. The growth came primarily from a 30% jump in revenue from its payment services, while its smaller lending and insurance vertical expanded nearly three times.
Revenue mix and new RBI licence
According to financial statements from Tofler, its revenue from payment services increased to Rs 6,299.7 crore in FY25 from Rs 4,788.5 crore in the previous year, while that from its lending and insurance business rose to Rs 557.6 crore from Rs 181 crore. A strong revenue growth, coupled with a slower rise in expenses, helped the company narrow its net loss to Rs 1,735.6 crore from Rs 1,996 crore in the previous year. However, after adjusting the Esop cost, the company reported a profit of Rs 630 crore, compared to Rs 197 crore in FY24.
Last week, PhonePe also received final authorisation from the Reserve Bank of India to operate as a payment aggregator, enabling it to expand beyond its UPI-based app into broader payment gateway services. With this licence, PhonePe can collect and settle merchant payments across cards, net banking, and wallets, with a particular focus on serving small and medium businesses.