PhonePe Selects Four Banks for IPO, Aiming for Valuation of Up to $15 Billion

Nitin Konde, Varun Bhardwaj

26 Feb 2025 — 3 min read

PhonePe Picks 4 Banks for IPO, Targets $15 Billion Valuation

PhonePe, owned by Walmart, has selected four investment banks as advisors as India's leading digital payments platform aims to enter the domestic tech IPO sector, targeting a valuation of up to $15 billion. As per a media report, PhonePe plans to initiate the IPO process in the first week of March and has engaged Kotak Mahindra Capital, JP Morgan, Citi, and Morgan Stanley. Additional advisors may be incorporated at a subsequent phase if necessary.

A media report corroborated this information and indicated that the IPO would likely consist of both main and secondary share issuances, with the listing anticipated in FY26. During a kick-off meeting, the issuing firm outlines essential strategies and the timeline for the IPO, as well as delineates the roles and responsibilities of the assembled advisors.

The media report indicates that this is anticipated to be a significant tech IPO from a market leader, with the issue size projected to exceed one billion dollars. These are preliminary stages, and the plans may evolve based on market conditions; nonetheless, currently, the firm intends to forgo potential profits for investors and is targeting a valuation of up to $15 billion.

Major Investors in PhonePe

The company stated in its FY24 annual report that PhonePe has garnered an impressive array of distinguished investors, who have collectively invested over INR 18,000 crore in the organisation to date. Walmart holds the largest holding, with additional investors including Microsoft, General Atlantic, Tiger Global, Ribbit Capital, TVS Capital, Tencent, and the Qatar Investment Authority. Notably, the share price of the publicly traded fintech counterpart One 97 Communications Limited, which owns and operates the Paytm brand, has increased by 72.28% during the past year.

Strategy to go Public

On February 20, PhonePe announced the initiation of preparatory measures for a prospective initial public offering (IPO) to be listed on Indian exchanges. Doug McMillon, CEO of Walmart, announced that PhonePe, Walmart's fintech subsidiary, is preparing for an IPO in India. PhonePe's staff has long desired to become a public company, and Walmart is enthusiastic about initiating these preliminary steps. PhonePe re-established its domicile from Singapore to India in December 2022. The corporation announced the establishment of a definitive corporate structure, designating each of its new non-payment enterprises as wholly owned subsidiaries.

The company stated that PhonePe's robust revenue and profit development throughout its varied business portfolio, as outlined in its FY23-24 annual report, renders this an opportune moment to initiate preparations for a public offering. Located in Bengaluru PhonePe is the preeminent digital payments entity in the country, commanding approximately 48 percent of the market share in the Unified Payments Interface (UPI), a real-time mobile payments platform operated by the National Payments Corporation of India (NPCI). Google Pay has the position of the second largest competitor, commanding a market share of approximately 37 percent.

The NPCI previously specified that no single non-bank third-party application may possess more than 30 percent of the market share, aiming to foster competition and mitigate the duopoly situation.

Nevertheless, the organisation had to prolong the deadline twice, extending it by two years to prevent discomfort to customers. The RBI said in a circular on December 31 that, taking into account various variables, the deadline for compliance of current TPAPs exceeding the volume cap is extended by two years, till December 31, 2026.