PhonePe becomes public entity, targets $15 billion valuation ahead of IPO
Fintech major PhonePe, a prominent player in India’s digital payments sector, has officially become a public limited company, signifying a crucial advancement towards its anticipated initial public offering (IPO). This transformation, concluded after an Extraordinary General Meeting on April 16, awaits final approval from the Ministry of Corporate Affairs. The company aims to secure a valuation of up to $15 billion, highlighting its drive to expand and solidify its position in India’s burgeoning fintech market. Supported by Walmart, PhonePe has enlisted Kotak Mahindra Capital, JP Morgan, Citi, and Morgan Stanley as its IPO advisors.
This strategic shift is part of PhonePe’s comprehensive corporate restructuring, which saw the company relocate its domicile from Singapore to India in December 2022. This restructuring involved establishing non-payment verticals as fully owned subsidiaries, which illustrates PhonePe’s strategy to diversify and strengthen its operational base beyond digital payments. The reorganisation reflects PhonePe’s intent to enhance operational efficiency and ensure compliance within its primary market, India.
On February 20, the digital payments platform owned by Walmart announced it was taking initial steps towards a potential IPO. Later, on February 25, news reports revealed that PhonePe had appointed Kotak Mahindra Capital, JP Morgan, Citi, and Morgan Stanley as advisors for the IPO, aiming for a valuation of around $15 billion.
During the extraordinary general meeting on April 16, the company approved a name change from “PhonePe Private Limited” to “PhonePe Limited”, according to a document filed with the RoC.
PhonePe redomiciled its headquarters from Singapore to India in December 2022, establishing a clear corporate structure with its new non-payment businesses as fully owned subsidiaries. Valued at approximately $12 billion in its most recent private fundraising round, the Bengaluru-based company currently commands close to 48% of India’s Unified Payments Interface (UPI) market, positioning it as a leader significantly ahead of competitors like Google Pay, which holds approximately 37% market share.
As the company readies for its IPO, its dominant market share in the UPI ecosystem is a key component of its valuation strategy. PhonePe’s robust market presence underscores its pivotal role in the fast-evolving fintech landscape of India, where digital payments continue to grow rapidly.
In the fiscal year 2024, PhonePe reported a significant 73 percent year-on-year increase in revenue, totaling Rs 5,064 crore. Its Profit After Tax (PAT) for the year amounted to Rs 197 crore, a notable improvement from the Rs 738 crore loss in the previous year.
