Bengaluru-based digital payments giant PhonePe has taken another major step towards going public. Backed by Walmart and global investor General Atlantic, the company has filed an updated Draft Red Herring Prospectus (UDRHP) with the Securities and Exchange Board of India (SEBI), signalling that its long-anticipated IPO is edging closer to reality.
The filing, made on January 21, offers a clearer picture of how PhonePe’s public debut will be structured—and who stands to cash out from it.
A Pure Offer-for-Sale: No Fresh Capital Raised
Unlike many high-profile IPOs that raise fresh capital to fuel growth, PhonePe’s public issue will be entirely an offer-for-sale (OFS). The IPO will consist of 5.06 crore equity shares being sold by existing shareholders, with no new shares being issued by the company.
This means that PhonePe itself will not receive any funds from the IPO. Instead, all proceeds will go directly to the shareholders who are selling their stakes. Such a structure typically indicates that the company is well-capitalised and is using the IPO primarily to provide liquidity to its investors and create a public market for its shares.
Walmart’s Arm Leads the Share Sale
The largest chunk of the OFS will come from promoter WM Digital Commerce Holdings, a Walmart-owned entity that currently holds a commanding 71.77 percent stake in PhonePe. As part of the IPO, the promoter will sell 4.59 crore shares, equivalent to 9.06 percent of the company’s total paid-up equity.
Even after the sale, Walmart will continue to remain firmly in control of PhonePe, retaining a dominant majority stake. The move reflects a gradual monetisation strategy rather than a full or aggressive exit, allowing Walmart to unlock some value while still backing the company’s long-term growth in India’s booming digital payments ecosystem.
Tiger Global and Microsoft Set to Exit
While Walmart is only trimming its stake, two other investors are making a complete exit from PhonePe through the IPO. Tiger Global PIP 9-1 and Microsoft Global Finance Unlimited Company—an Irish subsidiary of Microsoft Corporation—will sell their entire holdings as part of the OFS.
Together, these investors will offload 47.17 lakh shares. Their exit marks the end of an era for some of PhonePe’s earliest institutional backers, who supported the company during its high-growth years as India’s digital payments adoption surged post-2016.
Such exits are common in mature startups heading to public markets, where early investors look to lock in returns after years of backing the business through multiple funding cycles.
General Atlantic Emerges as the Largest Public Shareholder
Among non-promoter investors, General Atlantic Singapore PPIL stands out as the largest public shareholder in PhonePe, holding an 8.98 percent stake in the company. This highlights the private equity firm’s strong conviction in PhonePe’s long-term potential, even as other investors choose to exit.
Headstand, another key investor, follows with a 5.73 percent stake. The presence of long-term institutional shareholders is likely to reassure public market investors about the company’s governance and growth outlook, especially as PhonePe transitions from a startup-led culture to a publicly traded enterprise.
What the IPO Means for PhonePe and the Market
PhonePe’s IPO is expected to be one of the most closely watched public offerings in India’s fintech sector. As one of the country’s largest digital payments platforms, the company plays a central role in the UPI ecosystem, processing billions of transactions every month across payments, bill pay, recharges, and merchant services.
The decision to go public through a pure OFS suggests that PhonePe is focusing on stability rather than aggressive expansion funded by new capital. It also signals confidence in its balance sheet and operating model at a time when investors are increasingly scrutinising profitability and sustainable growth.
For the broader market, PhonePe’s IPO could serve as a litmus test for investor appetite for mature Indian fintech companies. A successful listing may encourage other late-stage startups to accelerate their own public market plans, while also reshaping how global investors view India’s digital-first consumer platforms.
Credits: MSN
The Road Ahead
With the updated UDRHP now filed, the next steps will involve SEBI’s review process, followed by final approvals and the launch of the IPO. While timelines can vary, the filing itself marks a decisive moment in PhonePe’s journey—from a fast-growing startup to a publicly listed fintech heavyweight.
As India’s digital payments story continues to evolve, PhonePe’s IPO could become a defining milestone in the next phase of the country’s fintech revolution.
