MC EXCLUSIVE Prosus-backed PayU plans to raise up to $300 million ahead of proposed IPO

PayU is working with investment bank HSBC on the proposed fundraise, which is in early stages currently, the sources said.

Prosus owned payments firm PayU is planning to dilute a minority stake to raise $300 million, people aware of the development have told Moneycontrol. It is working with investment bank HSBC on the proposed fundraise, which is in early stages currently, the sources said.

The fundraise comes ahead of a plan to list on Indian stock exchanges, with the minority stake sale being planned to gauge investor demand and set a valuation benchmark for the fintech company’s initial public offering (IPO), which is likely in 2026, one of the people cited above said.

“PayU is looking to raise approximately $250–300 million to diversify its shareholder base and strengthen its market position as it gears up for its IPO. The company has recently strengthened the board to reinforce governance and is taking additional steps to support sustainable growth,” a second source said.

Prosus remains a significant shareholder in PayU and recently infused $35 million into its credit business and backed the Mindgate investment, underscoring its confidence in fintech opportunities in India.

In March, PayU acquired a 43.5 percent strategic stake in Mindgate Solutions, a real-time payment technology firm. The company is one of the largest UPI technology service providers in the industry and works with the country's biggest banks.

Emails sent to PayU India, Prosus and HSBC remained unanswered till the time of publication.

PayU Business

PayU India helps businesses accept digital payments through a gateway that supports cards, UPI, wallets, EMIs and QR codes. It serves half a million merchants and offers no-code tools such as payment links and invoicing to simplify setup. The company also adds value through enterprise-grade features such as fraud protection, analytics, tokenisation, split payments, and AI-driven recommendations, making it more than just a payment processor.

On the lending side, PayU provides credit to individuals and businesses underserved by traditional banks. It offers instant loans, EMIs and “buy now, pal Later” solutions under a Reserve Bank of India approved NBFC licence.

PayU generates revenue via transaction fees from its payments arm and interest or processing charges from its lending business.

IPO Plans

While PayU had held talks with investment banks for a market debut in late 2023, the plans have been delayed and the IPO is now likely in 2026.

Recently, in June, Prosus told Reuters that it is not planning to list Indian digital payments and lending firm PayU this year, with the focus on improving the business over the next six to 12 months.

While Prosus hoped to list PayU by 2025 "that is not going to be our focus in the next year. Our focus is actually going to be to improve that business", Nico Marais, Prosus's chief financial officer told Reuters.