Walmart-owned PhonePe has received approval from the Securities and Exchange Board of India (Sebi) to go ahead with its IPO, sources close to the matter said. The company, which had confidentially filed its IPO papers in September, will be filing an updated Draft Red Herring Prospectus soon.
According to sources, the company could be looking to raise around Rs 12,000 crore primarily through the offer for sale (OFS) route. Besides parent Walmart, PhonePe’s investors include General Atlantic, Ribbit Capital, Tiger Global and TVS Capital Funds, among others.
Startups, including Meesho, Pine Labs, Groww, PhysicsWallah, Wakefit, and Shadowfax have recently listed on the bourses, with several of these filings made confidentially.
UPI Market Leadership
PhonePe continued to lead the Unified Payments Interface (UPI) market in December, with 45.4% market share by volume and 48.7% by value, according to data from the National Payments Corporation of India (NPCI). Google Pay and Paytm follow in second and third position, respectively.
PhonePe turned free cash flow-positive in FY25, with cash flow from operations at Rs 1,202 crore. Adjusted Ebitda (excluding Esop cost) also more than doubled to Rs 1,477 crore. In FY25 PhonePe reported a 40% year-on-year rise in revenue from operations to Rs 7,114.9 crore.
Diverse Revenue Streams
This growth came primarily from a 30% jump in revenue from its payment services, while its smaller lending and insurance vertical expanded nearly three times.
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.
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.