PhonePe’s IPO Moment Arrives as SEBI Gives Final Nod

India’s largest UPI payments player is inching closer to the public markets. PhonePe has received approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering, clearing a key regulatory milestone for what is shaping up to be one of the country’s most closely watched fintech listings.

The Walmart-owned company is expected to seek a valuation of around $15 billion, with plans to raise nearly Rs 12,000 crore ($1.35 billion) through an offer for sale (OFS) by existing shareholders. The company is likely to file its updated Draft Red Herring Prospectus (DRHP) in the coming days.

From Confidential Filing to Market Readiness

PhonePe had earlier taken the confidential pre-filing route with SEBI in September, a framework that allows companies to fine-tune disclosures and address regulatory feedback before making financials public. With regulatory clearance now in hand, the Bengaluru-based fintech is entering the final stretch of its IPO journey.

Unlike capital-raising listings, PhonePe’s IPO is expected to be entirely secondary in nature. The company is not looking to raise fresh funds, underscoring confidence in its balance sheet and cash flows as it transitions into a listed entity.

At the heart of PhonePe’s IPO pitch is its commanding position in India’s UPI ecosystem. The company controls roughly 45% of the UPI market, ahead of Google Pay’s estimated 35% share. UPI today processes more than 85% of India’s digital payments, making platform leadership a durable competitive advantage.

PhonePe handles close to 10 billion transactions every month, with transaction value exceeding Rs 12 lakh crore. That scale has translated into strong operating leverage. For FY24–25, the company reported Rs 7,115 crore in revenue, up 40% year-on-year, while turning free cash flow positive with operating cash flow of Rs 1,202 crore. Its adjusted PAT (excluding ESOP costs) more than tripled to Rs 630 crore.

Payments continue to anchor the business, accounting for over 90% of total revenue, even as PhonePe expands into adjacent verticals such as stockbroking (share market), lending, and insurance distribution.

A Test Case for India’s Fintech Public Markets

PhonePe’s listing is expected to be the second-largest new economy IPO after Paytm’s 2021 debut, which valued the company at around $20 billion. The contrast between the two listings will not be lost on investors.

While Paytm’s valuation later corrected sharply, other consumer internet and fintech firms have seen steadier post-listing performance. Groww’s valuation has expanded since listing, while PB Fintech has emerged as one of the sector’s stronger public-market success stories.

Against that backdrop, PhonePe’s decision to go public without raising fresh capital positions the IPO less as a funding event and more as a liquidity and governance milestone.

Who’s Selling, and Why It Matters

The offer for sale is expected to see participation from Walmart, Tiger Global, and Microsoft, with a combined dilution of around 10%. Investment banks, including Kotak Mahindra Capital, Citi, Morgan Stanley, and JP Morgan, are advising on the listing.

In October, General Atlantic increased its stake to around 9% through a $600 million secondary transaction. That deal was structured to provide employee liquidity rather than founder payouts, a signal closely watched by institutional investors assessing alignment and long-term intent.

As PhonePe steps into the public spotlight, its challenge will extend beyond sustaining UPI leadership. The company must show that its scale can be converted into durable, multi-line revenue streams without diluting focus on its core payments engine.

For India’s fintech sector, PhonePe’s IPO is more than a listing. It is a referendum on whether platform-led digital finance businesses, built on public digital infrastructure like UPI, can deliver predictable returns in the public markets.

With SEBI’s nod now secured, that test is set to move from private boardrooms to Dalal Street.