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Founder Share Sale Ahead of IPO
PhonePe's co-founders, Sameer Nigam and Rahul Chari, have sold a portion of their shareholding to private equity firm General Atlantic. The transaction involved 84.2 lakh shares each at INR 2,338.60 per share, totaling INR 3,937.32 crore for the founders. This sale occurred shortly after the founders were allotted fresh equity shares following the exercise of stock options under award schemes. General Atlantic Singapore PPIL Pte Ltd. was the acquiring entity. This move comes as PhonePe prepares for its Initial Public Offering (IPO).
IPO Readiness and Regulatory Approval
PhonePe has received approval from the Securities and Exchange Board of India (SEBI) for its proposed IPO, clearing a significant hurdle for one of India's largest fintech listings. The company confidentially filed its Draft Red Herring Prospectus (DRHP) in September 2025 and subsequently filed its updated DRHP in January 2026. The offering will be entirely an Offer for Sale (OFS), aiming to raise approximately INR 12,000 crore ($1.5 billion). The expected valuation for PhonePe is around $15 billion. Major investors including Walmart, Microsoft, and Tiger Global are expected to divest portions of their holdings, with Walmart planning to sell approximately 9.06% of its stake. Microsoft Global Finance Unlimited Company and Tiger Global PIP 9-1 are anticipated to fully exit their holdings.
Financial Performance: Growth Amidst Widening Losses
In the first half of fiscal year 2026 (H1 FY26), PhonePe's operating revenue increased by 22% to INR 3,918.5 crore. However, the company's net loss widened by 20% year-on-year to INR 1,444.4 crore. This expansion in losses was attributed to a rise in expenses, including employee benefits and payment processing charges. For the full fiscal year 2025 (FY25), PhonePe reported a revenue increase of 40.5% to INR 7,114.8 crore, while its net loss narrowed by 13.5% to INR 1,727.4 crore. The company's real money gaming (RMG) revenue saw a decline in H1 FY26 due to regulatory changes, though it did not materially impact overall revenue.
Strategic Investments and Market Position
Ahead of its IPO preparations, PhonePe also conducted an ESOP buyback program valued between INR 700 crore and INR 800 crore, benefiting over 1,000 employees. General Atlantic, an existing investor, significantly increased its stake in PhonePe through secondary share purchases, investing around $600 million in late 2025 to reach approximately a 9% holding. This transaction was primarily aimed at providing liquidity for employees to exercise stock options and cover associated tax liabilities, rather than a fresh capital raise for the company. PhonePe continues to hold a dominant position in India's Unified Payments Interface (UPI) ecosystem, commanding approximately 45-48% market share by transaction volume.