PhonePe IPO Gets SEBI Approval, Paving Way for 2026 Listing

Introduction to a Landmark Fintech Event

Digital payments leader PhonePe has received regulatory approval from the Securities and Exchange Board of India (SEBI) for its Initial Public Offering (IPO). This clearance marks a significant milestone for one of India's most anticipated fintech listings. The company, backed by global retail giant Walmart, is now set to file its Updated Draft Red Herring Prospectus (UDRHP), formally initiating the process for its public market debut. The approval sets the stage for a major event in the Indian stock market, providing investors with an opportunity to own a piece of the country's dominant payments platform.

IPO Structure: An Offer For Sale

The proposed public issue will be structured entirely as an Offer For Sale (OFS). This means that the IPO will involve existing shareholders, such as early investors and promoters, selling a portion of their stake to the public. Consequently, PhonePe itself will not raise any fresh primary capital through this offering. The proceeds from the sale will go directly to the selling shareholders, not the company's treasury. This structure indicates that the primary objective of the IPO is to provide liquidity for current investors and to establish a public market valuation for the company, rather than to fund its operational or expansion plans.

Dominance in India's Digital Payments Market

PhonePe holds a commanding position in India's digital payments ecosystem. The company consistently maintains a market share of over 45% in Unified Payments Interface (UPI) transactions, making it the undisputed leader in the space. The scale of its operations is vast; in December 2025 alone, PhonePe processed an impressive 9.8 billion transactions, according to data from the National Payments Corporation of India (NPCI). This sustained market leadership, even amidst fierce competition, underscores the strength of its platform and the trust it has built among millions of users across the country.

A Look at PhonePe's Financial Strength

The company's move towards a public listing is supported by robust financial performance. For the financial year 2024-25, PhonePe reported significant growth across key metrics, demonstrating both scale and improving profitability. The financials highlight a business that is not only growing its top line but also enhancing its operational efficiency.

During this period, the company's revenue surged by 40% to reach ₹7,115 crore. A pivotal achievement was turning free cash flow positive, with operating cash flow standing at ₹1,202 crore. Furthermore, its adjusted Profit After Tax (PAT), which excludes non-cash ESOP expenses, more than tripled to ₹630 crore, signaling a strong move towards sustainable profitability.

Regulatory Milestone and Next Steps

Receiving SEBI's approval is a critical step in the IPO journey, confirming that the company's preliminary documents meet the regulator's requirements. With this hurdle cleared, PhonePe will now file its UDRHP. This public document will contain comprehensive details about the company's business operations, financial statements, risk factors, and the specifics of the offer. The filing of the UDRHP will officially kick off the marketing and book-building process for the IPO, bringing it one step closer to listing on the stock exchanges.

Setting a Benchmark for the Fintech Sector

PhonePe's IPO is poised to be a landmark event for the Indian fintech industry. As the first major, profitable digital payments leader to go public, its listing will establish a crucial benchmark for the valuation of other fintech unicorns. The performance of PhonePe's stock post-listing will be closely watched by peers, investors, and analysts, as it could influence the IPO plans and valuation expectations of other large startups in the sector. It serves as a test of public market appetite for high-growth, scaled fintech businesses in India.

Analysis of the Public Offering

The decision to proceed with a pure OFS reflects confidence from the company's management and existing shareholders in its internal cash generation capabilities. By not raising primary capital, PhonePe signals that it has sufficient funds for its current growth trajectory. For investors like Walmart, Tiger Global, and Microsoft, the IPO provides a strategic opportunity to partially monetize their investment. For the public, it offers a chance to invest in a market leader that is integral to India's digital economy. The success of this IPO could reinvigorate the primary markets for technology companies in India.

Conclusion

In summary, PhonePe's receipt of SEBI approval for its IPO is a pivotal moment for the company and the broader Indian fintech landscape. With its dominant market share, strong revenue growth, and newfound profitability, the company is well-positioned for its public market debut. The upcoming filing of the UDRHP will provide further details, but the stage is set for an IPO that will not only unlock value for its existing shareholders but also set a new standard for the public listing of technology giants in India.