MC EXCLUSIVE PhonePe to file for IPO via confidential route by September-end

PhonePe to file for IPO via confidential route by September-end

Walmart-backed payments major PhonePe has started work on its initial public offering. Highly placed sources said that the company may opt for the confidential filing route and file for an IPO by the end of September. While the exact details on valuations that it might seek is in the process of finalisation, it is gathered that about 10 percent equity may be offered for sale in the proposed IPO.

PhonePe is also expected to raise some fresh capital in the process. In all, the IPO may be sized at about Rs 10,000–13,000 crore (approximately $1.2 – 1.5 billion), valuing the company at around $10 – 12 billion. The company is aiming at listing by early 2026.

While the IPO may offer some liquidity to a few investors, Walmart, the promoter of PhonePe, is unlikely to offload much stake in the upcoming IPO. “Some of the smaller investors such as Tiger Global and General Atlantic may seek a partial exit through the IPO,” said a banker who did not want to be named.

To be sure, US headquartered retail giant Walmart owns over 70 percent stake in PhonePe, while General Atlantic and Tiger Global hold less than 9 percent stake each.

Accounting for over 45 percent market share of UPI payments, PhonePe is the market leader in the QR-based payments space. It also operates in the payment gateway segment, apart from offering other financial products including insurance and loans through its app.

Investment bankers JP Morgan, Morgan Stanley, Citigroup and Kotak Mahindra Capital have been appointed to manage the issue.

An email sent to PhonePe confirming their IPO plans remained unanswered till publishing the article.

Founded in December 2015, originally as a subsidiary of Flipkart, the ownership structure of PhonePe changed after Walmart’s investment in Flipkart. Subsequently, in December 2020, Walmart recorganised PhonePe as its subsidiary, thereby spinning it off from Flipkart.