MC EXCLUSIVE Walmart owned PhonePe files for mega IPO of around Rs 12,000 crore via confidential route

PhonePe also posted its first-ever positive Adjusted EBIT (excluding ESOP costs) of Rs 117 crore.

Walmart-owned digital payments and financial services major PhonePe has filed draft papers with market regulator Sebi for a mega IPO via the confidential pre-filing route and is looking to raise around Rs 12,000 crore ( $1.35 bn) through a pure OFS or offer for sale, multiple industry sources in the know told Moneycontrol on the condition of anonymity.

Walmart, Tiger Global and Microsoft are the three shareholders looking to participate in the offer for sale, which will involve a combined dilution of around 10 per cent stake, the industry sources added.

An email query has been sent to Tiger Global and Microsoft, but an immediate response could not be elicited from them. This article will be updated as soon as we hear from the firms.

In response to an email query from Moneycontrol, a spokesperson for PhonePe said, "The company has filed the pre-filed Draft Red Herring Prospectus (“PDRHP”) with the Securities and Exchange Board of India and BSE Limited and the National Stock Exchange of India Limited in relation to the initial public offering of its equity shares, under Chapter IIA of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018. The filing of the PDRHP shall not necessarily mean that the Company will undertake the initial public offering."

On February 25, 2025, Moneycontrol was the first to report that the firm had picked 4 investment banks,  Kotak Mahindra Capital, Citi, Morgan Stanley, and JP Morgan, as advisors for a big-bang IPO and was targeting a listing valuation of up to $15 bn ( Rs 1,33,000 crore)

Later on September 4, Moneycontrol  reported that PhonePe may file draft papers via the confidential route by September end.

Shardul Amarchand Mangaldas, Cyril Amarchand Mangaldas and Trilegal are the legal advisors on the high-profile issue, according to sources.

Jefferies, Goldman Sachs, Axis Capital, and JM Financial are the other i-banks on the deal, these sources added.

Walmart is the majority shareholder in PhonePe, and other than Tiger Global and Microsoft, other investors include the likes of  General Atlantic, Ribbit Capital, TVS Capital, Tencen,t and Qatar Investment Authority, as per the February 2025 report by Moneycontrol.

PhonePe and rival Google Pay are the top two players in India's UPI ( unified payments interface) market. Incidentally, the share price of listed fintech peer One 97 Communications Limited, which owns and operates the brand Paytm, has risen by 73.43 per cent in the last year.

PhonePe: Lens on Financials

The firm saw a 40 percent year-on-year rise in revenue at Rs 7,115 crore in FY25 and also turned free cash flow positive, with operations generating Rs 1,202 crore for the year, Moneycontrol had reported earlier.

Its adjusted EBITDA (excluding ESOP costs) more than doubled to Rs 1,477 crore, while adjusted profit after tax surged 220 percent to Rs 630 crore, the report added.

PhonePe, which is diversifying into loan distribution and stock broking over and above its main payments business, also posted its first-ever positive Adjusted EBIT (excluding ESOP costs) of Rs 117 crore.

More on PhonePe

The leading digital payments app was launched in August 2016, and since then, the PhonePe Group has expanded into financial services - Insurance, Lending, & Wealth, as well as new consumer tech businesses - Pincode and Indus Appstore.

"As of March 2024, we have about 53 crore registered users, approximately 20 crore monthly active customers, 50 plus lakh net payment devices deployed and we process 770+ crore transactions monthly, amounting to Rs 10.5 lakh crore in total payment value," the firm said in its FY24 annual report.

The annual report added, "In the last few months, we have expanded globally with partnerships in 6 countries (Singapore, United Arab Emirates, Nepal, Sri Lanka, Bhutan and Mauritius), thus enabling UPI payments for our consumers traveling abroad."

The Confidential Filing Route

Introduced by Sebi as an alternate for main board issuers in November 2022, pre-filing allows companies to keep sensitive business details or financial metrics and risks under wraps, especially from rivals. On the other hand, in the standard format, the DRHP (draft red herring prospectus) becomes a public document post filing.

This gives issuers the comfort of confidentiality till they arrive at a final decision on the listing, and if required, they can even pull out later, depending on market conditions, without disclosing key information.

Also Read | Dalal Street Confidential: Why has India Inc warmed up to pre-filing of IPOs?

Other than PhonePe, several other issuers have opted for the confidential pre-filing route, like Tata Capital, Tata Play, Oyo, Swiggy, Vishal Mega Mart, Credila Financial Services, Indira IVF, and PhysicsWallah.