PhonePe IPO Gets SEBI Approval for ₹12,000 Crore Listing

Introduction

Walmart-backed digital payments leader PhonePe has received regulatory approval from the Securities and Exchange Board of India (SEBI) for its Initial Public Offering (IPO). This development marks a critical milestone, clearing the path for the fintech giant to proceed with its much-anticipated stock market listing. The company, which confidentially filed its draft papers in September 2025, can now move forward with filing an updated Draft Red Herring Prospectus (DRHP).

Understanding the IPO Structure

The upcoming public issue will be structured entirely as an Offer For Sale (OFS). This means the company itself will not raise any primary capital through the issuance of new shares. Instead, the IPO will provide an opportunity for existing shareholders to sell a portion of their stake to the public. Key investors expected to participate in the OFS include majority stakeholder Walmart, along with early backers like Tiger Global and Microsoft. Reports suggest the total issue size could be around ₹12,000 crore, involving a combined stake dilution of approximately 10%.

The Regulatory Journey

PhonePe initiated its IPO process by submitting a pre-filed DRHP through SEBI's confidential route on September 23, 2025. This route, introduced by SEBI in 2022, allows companies to keep sensitive financial and operational details private until they make a final decision on the listing. This flexibility is crucial for companies navigating volatile market conditions. With SEBI's approval now secured, PhonePe will file an updated DRHP that will be made public, providing detailed disclosures about its business, financials, and the terms of the offer.

A Look at PhonePe's Financial Health

PhonePe's move towards a public listing is supported by a strong financial performance in the fiscal year 2024-25. The company demonstrated significant growth and a clear trajectory towards sustainable profitability. Revenue from operations saw a robust 40% year-on-year increase, reaching ₹7,115 crore. More significantly, the company turned free cash flow positive, generating ₹1,202 crore from its operations. Its adjusted Profit After Tax (PAT), excluding ESOP costs, surged by 220% to ₹630 crore. Another key indicator of its operational efficiency was its first-ever positive Adjusted EBIT (Earnings Before Interest and Taxes) of ₹117 crore, excluding ESOP expenses.

Market Leadership and Business Diversification

Founded in 2015, PhonePe has established itself as the dominant force in India's digital payments ecosystem. It commands a 45% market share in Unified Payments Interface (UPI) transactions. In December 2025 alone, the platform processed an impressive 9.8 billion transactions. As of March 2024, the company reported having 53 crore registered users and over 20 crore monthly active customers.

Beyond its core payments business, PhonePe has successfully diversified its offerings. The company has expanded into a broad range of financial services, including insurance, lending, and wealth management. It has also ventured into new consumer technology businesses with the launch of Pincode, a hyperlocal commerce app, and the Indus Appstore, an Indian alternative to the Google Play Store. This diversified model strengthens its market position and revenue streams.

Strategic Foundation for Growth

Several strategic decisions have paved the way for PhonePe's public listing. In 2022, the company shifted its domicile from Singapore to India, a complex process that involved a tax payment of nearly ₹8,000 crore. This move underscored its commitment to the Indian market. The company's last private funding round in 2023 valued it at $12 billion. Furthermore, PhonePe has expanded its global footprint, enabling UPI-based payments in six international markets, including the UAE, Singapore, and Nepal, catering to Indian travelers abroad.

Conclusion and What Lies Ahead

The SEBI approval is a significant validation of PhonePe's business model and financial stability. With a dominant market share, diversifying revenue streams, and improving profitability, the company is well-positioned for its public debut. The upcoming IPO, structured as an OFS, will be one of the most closely watched events in the Indian fintech landscape. The next step for the company is to file its updated DRHP, which will provide investors with the necessary details to evaluate the offering. This listing is set to provide liquidity for its early investors and mark a new chapter in PhonePe's growth story.