PhonePe Takes the OFS Route as Global Backers Head for the Exit

PhonePe has refiled its updated Draft Red Herring Prospectus (UDRHP) with the Securities and Exchange Board of India (SEBI), setting the stage for a public listing structured entirely as an offer for sale (OFS). The move marks a pivotal moment, not just for PhonePe, but for India’s maturing fintech ecosystem.

Unlike earlier startup-era IPOs that leaned heavily on fresh capital infusion, PhonePe’s proposed public issue involves 5.06 crore equity shares being sold by existing shareholders. There is no fresh issue component, meaning the company itself will not receive any proceeds from the offering.

Walmart Reduces Exposure, Global Investors Exit

At the centre of the transaction is promoter WM Digital Commerce Holdings, owned by Wal-Mart International Holdings Inc., which currently holds 71.77% in PhonePe. Through the IPO, Walmart plans to offload 4.59 crore shares, equivalent to 9.06% of the company’s paid-up equity.

The remaining 47.17 lakh shares will be sold by financial investors Tiger Global PIP 9-1 and Microsoft Global Finance Unlimited Company, an Irish subsidiary of Microsoft Corporation, effectively marking their exit from the cap table.

Despite the exits, General Atlantic Singapore PPIL remains the largest public shareholder with an 8.98% stake, followed by Headstand Pte Ltd (5.73%) and 3State Ventures (1.03%).

A Liquidity Event, Not a Fundraise

PhonePe’s OFS-only structure reflects a broader recalibration underway in late-stage tech IPOs. With capital markets demanding clearer paths to profitability, the IPO appears positioned as a liquidity event for long-term backers rather than a growth capital exercise.

SEBI cleared PhonePe’s confidential DRHP on January 20, paving the way for the public filing. The company had pre-filed its confidential documents in September 2025, signaling that the IPO has been in preparation for several quarters.

Market expectations suggest the fintech firm could seek to raise ₹12,000 crore ($1.35 billion) at a valuation of approximately $15 billion, entirely through shareholder stake sales.

Scale at the Core, Losses Still in Focus

Operationally, PhonePe continues to dominate India’s digital payments landscape. Launched as a UPI-based app in August 2016, it was the first private non-bank player to enter the UPI ecosystem following its national rollout earlier that year. According to NPCI data, PhonePe remains the largest platform by transaction volume and total payment value for customer-initiated UPI payments.

However, scale has not yet translated into profitability.

For the six months ended September 2025, PhonePe reported a net loss of ₹1,444.4 crore, widening from ₹1,203.2 crore in the same period last year. During the same window, revenue from operations rose 22.2% to ₹3,918.5 crore.

On an annual basis, the company narrowed its FY25 loss to ₹1,727.4 crore, compared to ₹1,996.1 crore in FY24, while revenue surged 40.5% year-on-year to ₹7,114.8 crore.

From Payments App to Full-Stack Fintech

Founded in 2012 and acquired by Flipkart in 2015, PhonePe has steadily expanded beyond payments. Its portfolio now spans insurance, lending, stock broking, mutual fund distribution, and digital infrastructure plays such as Share.Market and the Indus Appstore.

As part of its IPO readiness, the company shifted its domicile to India in 2022, completed its separation from Flipkart the same year, and converted into a public limited company in April 2025.

Since inception, PhonePe has raised nearly $2.3 billion, positioning it among India’s most capitalised fintech platforms.

PhonePe’s refiling is less about debut excitement and more about fintech’s transition into a disciplined, public-market phase. The absence of fresh capital, the partial pullback by Walmart, and the exit of marquee global investors point to an ecosystem where liquidity, governance, and sustainability now outweigh rapid expansion narratives.

Post-listing, PhonePe will join a cohort of publicly traded fintech peers including Paytm, PB Fintech, Pine Labs, MobiKwik, and Groww—each navigating its own balance between growth, margins, and market scrutiny.

For investors and industry watchers alike, PhonePe’s IPO may serve as a benchmark for how India’s largest consumer fintechs recalibrate as they move from private scale to public accountability.