Walmart-owned PhonePe, one of India’s largest digital payments and financial services players, has officially taken its first big step toward the public markets. The Bengaluru-headquartered unicorn has filed draft papers with the Securities and Exchange Board of India (SEBI) under the confidential pre-filing route, seeking to raise nearly ₹12,000 crore ($1.35 billion) through a pure offer for sale (OFS).
A Pure OFS Play
Unlike several other Indian startups that combine fresh issues with OFS to raise growth capital, PhonePe’s IPO will reportedly be a 100% offer for sale. This means that the proceeds from the issue will not flow into the company but will allow existing shareholders to partially exit.
Three marquee investors — Walmart, Tiger Global, and Microsoft — are expected to dilute a combined 10% stake in this offering. For Walmart, which acquired PhonePe as part of its Flipkart takeover in 2018 and later spun it out, this could mark the beginning of monetizing its multi-billion-dollar bet on India’s fintech market.
Targeting a Mega Valuation
PhonePe has been among the most closely watched IPO candidates in India’s startup ecosystem. The company is reportedly targeting a valuation of up to $15 billion (₹1.33 lakh crore) at listing, making it one of the largest fintech IPOs in Indian capital market history.
If successful, this would place PhonePe firmly in the league of India’s most valuable listed tech players, alongside Paytm and Policybazaar, and would also mark Walmart’s biggest public markets play in the country since Flipkart remains unlisted.
Who’s Running the Show?
PhonePe has brought on board an elite set of investment bankers to steer its IPO journey. Kotak Mahindra Capital, Citi, Morgan Stanley, and JP Morgan have been appointed as advisors, reflecting the company’s ambition for a “big-bang” listing that will capture both domestic and global investor attention.
The choice of multiple heavyweight bankers signals that PhonePe is positioning itself for a blockbuster debut, leveraging its scale in UPI payments, merchant solutions, insurance, lending, and wealth management.
SEBI’s Confidential Route Explained
PhonePe is making use of SEBI’s confidential pre-filing route — a relatively new mechanism introduced in 2022. Under this, companies can file draft papers without immediately disclosing sensitive details to the public. This provides issuers flexibility to test regulatory waters and investor appetite before making a full-fledged disclosure.
Importantly, filing does not necessarily mean the IPO will go ahead immediately. Companies can wait, tweak their strategy, or even withdraw depending on market conditions. A spokesperson for PhonePe clarified that the filing “shall not necessarily mean that the company will undertake the initial public offering.”
Riding on India’s Fintech Boom
PhonePe’s timing aligns with a broader resurgence of India’s capital markets, where both consumer internet and fintech companies are once again exploring IPOs after a relatively quiet 2023.
With over 520 million registered users and dominance in the Unified Payments Interface (UPI) ecosystem, PhonePe has built itself into a household brand. Beyond payments, it has aggressively expanded into insurance distribution, digital lending, investment products, and merchant solutions — making it a diversified financial services platform.
This diversified playbook could appeal to investors looking for long-term exposure to India’s rapidly digitizing economy.
The Road Ahead
While PhonePe’s scale and brand recall are undeniable, the IPO will also shine a spotlight on the profitability question. Like many fintech peers, the company has historically prioritized growth over bottom-line performance. Investors will closely scrutinize its financials to assess whether it can chart a credible path to sustainable profitability, especially given Paytm’s turbulent post-IPO journey.
Still, with the backing of Walmart, participation from global investors like Microsoft, and a strong grip on India’s digital payments backbone, PhonePe is better positioned than most to script a successful listing story.
Credits: The Economic Times
Conclusion
PhonePe’s confidential filing marks the start of what could be one of the largest fintech IPOs in India. If market conditions remain favorable, the offering will not only provide an exit opportunity for global investors but also cement PhonePe’s place as a leading publicly listed financial services giant.
As India continues to digitize at breakneck speed, all eyes will now be on how PhonePe navigates the listing process, investor appetite, and its roadmap to profitability in the public markets.
