PhonePe receives IPO approval from SEBI

With the regulatory green light, PhonePe is preparing to file its Updated Draft Red Herring Prospectus (UDRHP) in the coming days. The IPO is expected to hit the primary markets in the first half (H1) of 2026.

IPO Structure and Valuation

Unlike many recent tech listings, PhonePe’s IPO is currently structured as a pure Offer for Sale (OFS), meaning the company is not seeking to raise fresh primary capital at this stage.

• Target Valuation: Between $12 billion and $15 billion.
• Issue Size: Approximately ₹11,000 crore to ₹13,000 crore ($1.3 billion – $1.5 billion).
• Key Sellers: Major existing backers, including Walmart, Tiger Global, General Atlantic, and Microsoft, are expected to divest a portion of their holdings (roughly 10%).
• Advisors: The company is working with Kotak Mahindra Capital, Citi, Morgan Stanley, and JP Morgan for the listing.

Why Investors are Watching PhonePe

PhonePe enters the public market with a significantly different profile than previous fintech listings:

1. UPI Dominance: PhonePe holds a commanding 45–48% market share of India’s UPI ecosystem, processing nearly 10 billion transactions worth over ₹12 lakh crore every month.
2. Narrowing Losses: Financials for FY25 showed revenue jumping 40% to ₹7,115 crore, with net losses narrowing to ₹1,727 crore. Crucially, the company turned free cash flow positive with ₹1,202 crore in operating cash flow.
3. Revenue Diversification: While payments anchor 90% of revenue, the firm has successfully launched adjacent verticals including Share.Market (stockbroking), insurance distribution, and lending.

What’s Next?

Following the UDRHP filing, the company will conduct global roadshows to gauge institutional appetite. If successful, the listing on BSE and NSE will serve as a crucial benchmark for other Indian fintech “decacorns” like Groww and Razorpay that are eyeing 2026–2027 IPO windows.