Fintech major PhonePe’s upcoming initial public offering (IPO) will see its parent Walmart partially offloading its stake in the company, while investors Tiger Global and Microsoft Global Finance will look to sell their entire holdings. As per the updated draft red herring prospectus, these three investors will together look to sell stakes worth Rs 10,115 crore.
The issue only comprises an offer-for-sale of up to 50.7 million equity shares, and will likely open in March-end or April. Among the three selling shareholders, parent Walmart – which has invested through WM Digital Commerce Holdings – will look to sell 45.9 million shares, reducing its holding by up to 9%.
Walmart’s weighted average cost of acquisition is Rs 1,996.8 a piece, making these shares worth around Rs 9,173 crore.
Investor Shareholding Patterns
Walmart owns a 71.77% stake in the company, while Tiger Global has a 0.2% stake and Microsoft Global Finance has a 0.71% stake. Both Tiger Global and Microsoft are looking to sell their entire stakes in the company, which translates to 1 million and 3.7 million shares, respectively.
Besides these, US-based private equity firm General Atlantic is the second-largest shareholder with an 8.9% stake. Last year in September, cofounders Sameer Nigam and Rahul Chari sold a part of their holdings to General Atlantic soon after a fresh equity allotment, as per the document.
Each founder offloaded 8.4 million shares at Rs 2,337.6 apiece, taking the total deal value to Rs 3,938 crore. As a result, Nigam and Chari received Rs 1,969 crore each from the transaction. Just five days before the transaction, both founders were allotted 21.6 million shares each after exercising stock options granted under PhonePe’s Award Schemes. Nigam and Chari own 2.55% in the company each.
Financial Performance Trends
In the first six months of FY26, PhonePe reported a 22% year-on-year rise in revenue from operations to Rs 3,918 crore, while net loss widened to Rs 1,444 crore from Rs 1,203 crore in the same period a year ago. The wider losses come after the company was able to reduce its losses over the last two financial years. Between FY23 to FY25, the company’s losses reduced sharply to Rs 1,727 crore from Rs 2,796 crore, while the topline more than doubled to Rs 7,114 crore.
Most of PhonePe’s revenue – more than 80% – comes from its payments services, including consumer and merchant payments. The company earns transaction processing fees from consumers, who use the app to send money online, 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.
Vertical Business Growth
Besides this, the company’s lending and insurance distribution vertical reported strong growth in the first half of this year. Revenue from these businesses more than doubled to Rs 452.6 crore in H1FY26, contributing about 11% of total revenue. In the same period a year ago, these businesses contributed around 7%.
In its IPO document, the company flagged its over-reliance on the consumer payments business as a risk, as it is more than half of its topline. Although this share has reduced consistently from 83% in FY23 to 56% in H1FY26, it is still considerably high.
The company also flagged the proposed 30% cap on UPI transaction volumes per app as a significant risk to its business. While the cap is aimed at reducing concentration risk, enforcement of the cap has been deferred until December 31, 2026. PhonePe said its UPI market share stood at 46.85% as of September 30, 2025, and any future enforcement could restrict new user onboarding and impact growth.