PhonePe Aims for $10.5 Billion Valuation in Upcoming India IPO, Targeting $1 Billion Fundraising
Walmart-backed fintech giant PhonePe is gearing up for a significant initial public offering (IPO) in India, aiming for a valuation between $9 billion and $10.5 billion, equivalent to approximately ₹75,000 crore to ₹87,000 crore. The company plans to raise around $1.05 billion through an equity sale, as reported by sources familiar with the matter. This valuation marks a decrease from its last funding round in 2023, where PhonePe was valued at $12 billion after raising $100 million. Despite the lower valuation, the upcoming IPO is set to be the second-largest fintech IPO in India, following Paytm’s listing in November 2021.
Details of the IPO
The PhonePe IPO will be structured entirely as an offer-for-sale (OFS) by existing shareholders, which include major investors like Walmart, Tiger Global, and Microsoft Global Finance. According to the updated draft papers, these shareholders plan to offload stakes worth around ₹10,115 crore, or about $1.1 billion, through the public issue. Notably, PhonePe’s promoter, WM Digital Commerce Holdings Pte, intends to sell approximately 45.9 million shares, representing a 12% stake in the company. The shares will be priced at ₹1,996.8 each, based on the weighted average cost of acquisition. Both Microsoft and Tiger Global are also looking to exit their investments through this IPO.
Financial Performance and Growth
PhonePe has demonstrated impressive financial growth over the past three fiscal years, as outlined in its draft red herring prospectus (DRHP). The company’s revenue from operations surged to ₹7,114.85 crore in FY25, up from ₹2,914.28 crore in FY23, reflecting a compound annual growth rate (CAGR) of 56.25%. Additionally, the company’s revenue mix has diversified beyond its core UPI payments. The contribution from merchant payments increased significantly, rising from 14.75% in FY23 to 30.78% by September 2025. Financial services, which include lending and insurance distribution, also saw growth, expanding from 0.96% in FY23 to 11.55% in the first half of the current fiscal year.
Improving Profitability and User Base
PhonePe has made notable strides in reducing its losses, with restated losses declining by over ₹1,060 crore between FY23 and FY25, resulting in a total loss of ₹1,727.41 crore. The company’s loss margins improved significantly, moving from (90.68%) to (22.64%) during the same period. Furthermore, PhonePe achieved positive adjusted EBITDA in both FY24 and FY25, and reported adjusted EBIT profitability in FY25. The company also generated free cash flow of ₹190.47 crore in FY25 and over ₹250 crore in the six months ending September 30, 2024. As of September 30, 2025, PhonePe boasted over 650 million registered users and a merchant network exceeding 47 million, showcasing its expansive reach in the fintech sector.
Future Outlook
PhonePe filed its draft papers for the IPO in September and aims to complete the process by April, contingent on favorable market conditions and the absence of significant disruptions, such as the ongoing military conflict in the Middle East. The company’s robust financial performance and expanding user base position it well for a successful public offering, further solidifying its status as a key player in India’s rapidly evolving fintech landscape.
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