Whalesbook
Regulatory Green Light for PhonePe's Public Debut
PhonePe, the digital payments powerhouse backed by Walmart, has received a significant regulatory nod from the Securities and Exchange Board of India (SEBI) for its Initial Public Offering (IPO). This approval clears a crucial hurdle for the company, which had previously filed its Updated Draft Red Herring Prospectus (UDRHP). The upcoming public offering is set to be structured exclusively as an Offer for Sale (OFS), meaning existing shareholders will divest a portion of their holdings without the company issuing new shares. This move is anticipated to raise approximately ₹12,000 crore, with a targeted company valuation of around $15 billion. Major investors including Walmart, Tiger Global, and Microsoft are expected to collectively reduce their stake by about 10% through this OFS mechanism. PhonePe's last reported valuation stood at $14.5 billion following a $600 million funding round in late 2025, a notable increase from its $12.5 billion valuation in May 2023.
Robust Financial Performance Bolsters IPO Prospects
Ahead of its public listing, PhonePe has showcased strong financial performance for the fiscal year ending March 2025 (FY25). Operating revenue surged by 40.4% year-on-year to ₹7,114.8 crore, up from ₹5,064.1 crore in FY24. Despite a 21.1% increase in total expenses to ₹9,394 crore, the company successfully narrowed its consolidated net loss by 13.4% to ₹1,727.4 crore from ₹1,996.1 crore in the previous fiscal year. Key profitability metrics also demonstrated significant improvement. Adjusted EBITDA, excluding employee stock option costs, more than doubled to ₹1,477 crore from ₹652 crore in FY24. The company also reported a substantial jump in Adjusted Profit After Tax (PAT) by 220% to ₹630 crore, and for the first time, achieved a positive Adjusted Earnings Before Interest and Taxes (EBIT) of ₹117 crore. A significant operational milestone was achieved as PhonePe turned free cash flow positive, generating ₹1,202 crore from its operations during FY25. Major cost drivers included employee benefit expenses (₹4,097 crore) and payment processing charges, which increased by 44.7% to ₹1,688.1 crore.
Market Leadership and Strategic Outlook
PhonePe maintains a dominant position in India's digital payments landscape, commanding over 45% market share in Unified Payments Interface (UPI) transactions. In December 2025, the platform processed approximately 9.8 billion transactions, underscoring its operational scale. CEO Sameer Nigam has articulated that the core payments business has achieved market leadership and maturity, positioning the company for the accountability that comes with public listing. The company has also strategically shifted its domicile to India, with the clear intention of listing locally [cite: Source A - user provided, 9]. The banking syndicate managing the IPO includes prominent names such as Kotak Mahindra Capital, Citi, Morgan Stanley, and JP Morgan.
Comparative Market Entry
PhonePe's anticipated IPO is set to become one of India's most significant new economy listings, potentially ranking as the second largest after Paytm's debut in late 2021. Paytm had gone public with an issue size of approximately ₹18,000 crore at a valuation of around $20 billion. Other recent major tech listings include Swiggy (₹11,300 crore) and the public offerings of wealth-tech platforms like Groww and PB Fintech.
Market Reaction and Anticipation
With SEBI's approval secured, PhonePe is poised to enter the public markets. The move is generating considerable interest due to the company's market dominance, strong financial recovery, and the structured OFS approach designed to offer liquidity to its early investors. The success of this IPO could further shape the competitive landscape for digital payments and fintech in India.