Walmart-owned PhonePe begins preparing for IPO listing in India

PhonePe, a fintech firm, has started preparations for an initial public offering (IPO) on Indian exchanges. The Walmart-owned firm was valued at $12 billion in its last funding round in 2023.  

PhonePe, which competes with Paytm and Google Pay in the expanding local fintech market, completed its separation from Flipkart and redomiciled from Singapore to India in December 2022, paying approximately Rs 8,000 crore in taxes to the government. The move as stated by the compnay, enabled it to establish a clear corporate structure, with each of its new non-payment businesses operating as fully owned subsidiaries. 

Sameer Nigam, PhonePe's founder had previously stated that the company would not pursue an IPO until there was clarity on the market share cap. "The UPI market cap overhang is definitely a problem for us. I feel nervous going into the market if there’s a 30 percent market share cap lurking or booming and going and asking retail investors to put money against today’s market share of PhonePe," he explained.

“The company is commencing preparatory steps in connection with its potential IPO and plans to list on Indian exchanges. This marks a significant milestone for the company, which will celebrate its 10-year anniversary this year, and has grown to serve hundreds of millions of customers with innovative financial services and technology solutions,” PhonePe said in a statement.

“PhonePe's strong top-line and bottom-line growth across its diverse business portfolio, as detailed in its FY23-24 annual report, makes this a suitable time to prepare for a public listing,” the company added. 

In FY24, the Bengaluru-based company reported a 73% year-on-year increase in revenue, reaching Rs 5,064 crore, driven by cost efficiency and product diversification. PhonePe Group recorded an adjusted Profit After Tax (PAT) of Rs 197 crore, a significant turnaround from a loss of Rs 738 crore in the previous year.