Razorpay likely to go public in FY28, aims to complete reverse flipping by FY25, says Co-Founder

In December 2023, Razorpay received the final authorisation from the Reserve Bank of India (RBI) to operate as Payment Aggregators (PA) and was allowed to onboard new merchants on its platform after almost two years. On this, Kumar said that the company had reported its best quarter earlier this year and is looking at acquiring more merchants going ahead this fiscal.

Razorpay, one of India's leading digital payment processors, expects to complete shifting its parent entity from the US to India this fiscal year as it prepares for an initial public offering on local stock exchanges in 2027-28, co-founder Shashank Kumar said.

“Right now, we are in the process of flipping back, which we'll probably finish this fiscal year. I think we are looking at a 2027-28 sort of timeframe for an IPO, and are definitely moving towards that,” Kumar told Moneycontrol.

Founded in 2014 by Kumar and Harshil Mathur, Razorpay is backed by investors like Y Combinator, GIC, Peak XV Partners, Ribbit Capital, Matrix Partners, MasterCard, and others who have collectively invested over $740 million in the company. The company was last valued at over $7 billion.

Also read: Ghost of Paytm’s debacle continues to weigh on fintech IPOs

Merchant expansion

In December 2023, Razorpay received final authorisation from the Reserve Bank of India (RBI) to operate as a payment aggregator (PA) and was allowed to onboard new merchants on its platform after almost two years.

Regarding this, Kumar said the company had reported its best quarter earlier this year and is looking at acquiring more merchants this fiscal.

“For at least the last six months, we have been fully focussed on driving merchant growth and onboarding new merchants, which has been going well. We had our best quarter recently,” Kumar added.

The company's latest financials show that Razorpay reported a consolidated revenue of Rs 2,279 crore in FY2023, up nearly 53 percent year-on-year (YoY) from Rs 1,481 in FY22, mainly on account of a rise in small and medium enterprise (SME) customers. Despite a jump in revenue, the fintech reported a net profit of Rs 7.3 crore for FY23, which was flat compared to Rs 7.2 crore reported in the previous financial year, according to the company's Registrar of Company (RoC) filings.

The company's total expenses rose 54.6 percent YoY to Rs 2,283 crore in FY23. Employee benefit expenses, which includes salaries and other employee payouts, comprised around 28 percent of the total expenses, at Rs 638 crore. The company's finance costs came to Rs 5.7 crore in FY23.

Kumar also highlighted the consolidation spree in the sector and said that the trend may sustain going ahead. “The number of companies seriously handling payments has come down. There has been a lot of consolidation. And in the future also, things will be on a similar trajectory,” Kumar added.