Walmart-owned fintech major PhonePe has reportedly taken a key step towards its much-anticipated stock market debut by filing pre-draft papers with the Securities and Exchange Board of India (SEBI) through the confidential route.
The company, one of the biggest players in India’s digital payments space, is seeking to raise nearly Rs 12,000 crore ($1.35 billion) in what will be a pure Offer for Sale (OFS), reported Moneycontrol, citing people familiar with the matter.
Key Shareholders to Offload Stakes
According to industry sources, three existing shareholders, Walmart, Tiger Global, and Microsoft, are set to participate in the OFS, collectively diluting around 10 per cent of their combined holdings.
While PhonePe and SEBI have not disclosed full details publicly, the confidential filing route allows issuers to keep sensitive business data under wraps until a final decision is made on launching the IPO.
Responding to queries, a PhonePe spokesperson told the news organisation, “The company has filed the pre-filed Draft Red Herring Prospectus (PDRHP) with SEBI, BSE and NSE in relation to the initial public offering of its equity shares, under Chapter IIA of the SEBI (ICDR) Regulations, 2018. The filing of the PDRHP shall not necessarily mean that the Company will undertake the initial public offering.”
Advisory Team and Listing Plans
Earlier this year, PhonePe appointed four global investment banks, Kotak Mahindra Capital, Citi, Morgan Stanley, and JP Morgan, as lead advisors. In addition, Jefferies, Goldman Sachs, Axis Capital, and JM Financial have joined the advisory panel, the report said. Law firms Shardul Amarchand Mangaldas, Cyril Amarchand Mangaldas, and Trilegal are advising on the legal aspects of the issue.
Reports suggest that PhonePe is targeting a valuation of up to $15 billion (Rs 1.33 lakh crore) for its listing. The confidential filing route, introduced by SEBI in late 2022, offers companies the flexibility to withdraw or modify IPO plans without making sensitive disclosures public.
Strong Financial Performance
PhonePe’s recent financial performance is likely to bolster investor interest. For FY25, the company reported a 40 per cent rise in revenue to Rs 7,115 crore. It also turned free cash flow positive, generating Rs 1,202 crore from operations. Adjusted EBITDA (excluding ESOP costs) doubled to Rs 1,477 crore, while adjusted profit after tax surged 220 per cent to Rs 630 crore. For the first time, the company also posted a positive Adjusted EBIT of Rs 117 crore.
Beyond its payments business, PhonePe is actively expanding into new verticals, including loan distribution and stock broking, alongside its financial services portfolio.
Market Leadership and Global Push
Launched in 2016, PhonePe has emerged as one of the top two players in India’s UPI ecosystem, competing directly with Google Pay. The company’s FY24 annual report highlighted its vast user base of 53 crore registered users and 20 crore monthly active customers. It processes more than 770 crore transactions each month, amounting to Rs 10.5 lakh crore in payment value. The company has also deployed over 50 lakh payment devices across the country.
PhonePe has started extending its footprint overseas, with partnerships in six countries, including Singapore, UAE, Nepal, Sri Lanka, Bhutan, and Mauritius, allowing Indian users to make UPI payments while travelling abroad.
What the Confidential Route Means
The confidential IPO filing option allows issuers like PhonePe to test the waters without revealing key financial or strategic details to rivals. Under this route, the draft prospectus remains private until the company is ready to launch the offer. It also gives issuers the flexibility to delay or withdraw plans without exposing sensitive information.
For PhonePe, this pathway ensures that the company can gauge market conditions before formally announcing its mega IPO, which is expected to be one of the largest fintech listings in India.
