PhonePe files for ₹12,000cr IPO via confidential route
What's the story
Walmart-owned PhonePe has filed draft papers with the Securities and Exchange Board of India(SEBI) for an initial public offering (IPO) via the confidential pre-filing route. The company is looking to raise around ₹12,000 crore ($1.35 billion) through a pure offer-for-sale (OFS). This will see participation from Walmart, Tiger Global, and Microsoft. The move will involve a combined stake dilution of about 10%.
Market strategy
PhonePe's targeted listing valuation and financial performance
PhonePe had previously selected Kotak Mahindra Capital, Citi, Morgan Stanley, and JP Morgan as advisors for its upcoming IPO. The company is targeting a listing valuation of up to $15 billion (₹1.33 lakh crore). PhonePe has also been posting impressive financial results. In FY25, the company's revenue jumped 40% year-on-year to ₹7,115 crore and it turned free cash flow positive with operations generating ₹1,202 crore for the year.
Growth indicators
Key operational metrics for PhonePe in FY25
PhonePe's adjusted EBITDA (excluding ESOP costs) more than doubled to ₹1,477 crore, while its adjusted profit after tax skyrocketed 220% to ₹630 crore. The company also posted its first-ever positive Adjusted EBIT (excluding ESOP costs) of ₹117 crore. As of March 2024, PhonePe had around 530 million registered users and over 200 million monthly active customers. It deployed over five million net payment devices and processed over 770 million transactions a month worth ₹10.5 lakh crore in total payment value.
International growth
Global expansion and UPI payments
In its FY24 annual report, PhonePe said it has expanded globally with partnerships in six countries (Singapore, UAE, Nepal, Sri Lanka, Bhutan, and Mauritius). This has enabled UPI payments for its consumers traveling abroad. The confidential pre-filing route was introduced by SEBI as an alternative for main board issuers in November 2022. It allows companies to keep sensitive business details or financial metrics and risks under wraps from competitors until they make a final decision on listing.