PhonePe stated that it had created a clear corporate structure with each of its new non-payment companies as fully owned subsidiaries when it announced its plans to go public. In 2022, it relocated from Singapore to India.
CEO Doug McMillon stated on February 20 that Walmart is eager to begin the process of launching its Indian fintech subsidiary PhonePe’s initial public offering (IPO).
“I would like to announce that our fintech company, PhonePe, is getting ready for an initial public offering (IPO) in India. In response to the company’s Q4FY25 results, McMillon informed analysts, “Our PhonePe team has long aspired to be a public company, and we are excited to be taking these early steps.”
PhonePe was purchased by the Bentonville-based retail behemoth in August 2018 as part of its Flipkart takeover. Before splitting from the e-commerce company in December 2022 and moving its headquarters from Singapore to India, the fintech giant was a Flipkart affiliate.
PhonePe stated that it had created a clear corporate structure with each of its new non-payment companies as fully owned subsidiaries when it announced its plans to go public. In its most recent private fundraising round, PhonePe was valued at about $12 billion.
Walmart International President and CEO Kathryn McLay stated that PhonePe’s initial public offering (IPO) is a noteworthy achievement for the business, which is commemorating its tenth anniversary this year.
By the end of January 31, the PhonePe company’s total payment volume (TPV) had reached $1.7 trillion, with approximately 310 million transactions occurring per day. It is a tremendously successful company, and we are thrilled to announce that they will start preparing for an initial public offering (IPO),” she stated.
With nearly a 48 percent market share in Unified Payments Interface (UPI), the real-time mobile payments network operated by the National Payments Corporation of India, the Bengaluru-based business is the biggest player in the nation’s digital payments market. With almost 37% of the market, Google Pay is the second-biggest player.
The company’s decision to proceed with the IPO plan may have been influenced by the payments firm’s positive revenue growth. Due to cost reduction and product diversification, the Bengaluru-based company’s revenue increased by 73% year over year to Rs 5,064 crore in FY24. Despite suffering a loss of Rs 738 crore the year before, PhonePe Group reported an adjusted Profit After Tax (PAT) of Rs 197 crore.
In the past, Sameer Nigam, the founder of PhonePe, stated that the company would only pursue a public offering if it could consistently report net profit. The most recent action shows that the business has managed its profitability during the current fiscal year as well.
Simultaneously, the business has been struggling with the UPI market share cap uncertainty.
In an effort to break the duopoly, NPCI has been actively urging alternative financial apps to increase UPI’s competitiveness. Prior to this, the organization had ruled that no one non-bank third-party app could hold more than 30% of the market.
Nigam has previously stated that unless the market share cap was clarified, the business would not pursue an IPO. “We are undoubtedly having issues with the UPI market cap overhang. “If there is a 30 percent market share cap lurking or booming and going and asking retail investors to put money against today’s market share of PhonePe, I feel nervous going into the market,” he stated.
