PhonePe Files Confidential Draft Papers For Potential ₹12,000 Crore IPO

Walmart-backed fintech giant PhonePe has confidentially submitted draft papers to the Securities and Exchange Board of India (SEBI) for its proposed initial public offering (IPO), the company confirmed in a statement on Wednesday. Citing a Moneycontrol report, the filing targets raising approximately Rs 12,000 crore through a mix of fresh shares and an offer for sale by existing promoters, positioning PhonePe as a major player in India's burgeoning digital payments ecosystem.

As the largest UPI transaction handler with over 50% market share, PhonePe's move signals confidence in its growth trajectory amid regulatory tailwinds and expanding consumer adoption, though the confidential status means no firm timeline for the listing has been set.

The announcement underscores PhonePe's evolution from a payments app to a comprehensive financial services platform, encompassing insurance, mutual funds, and lending. Founded in 2015 and acquired by Flipkart in 2016—subsequently inherited by Walmart in its $16 billion Flipkart deal—PhonePe processed 8.4 billion UPI transactions in August 2025 alone, per NPCI data, outpacing rivals like Google Pay. The IPO filing follows a period of aggressive expansion, including a 2024 merger with parent Flipkart to streamline operations and a valuation surge to $12 billion.

Sources indicate the offering could value the company at Rs 1.1 lakh crore post-issue, attracting institutional investors eyeing India's $100 billion digital economy by 2030. However, experts caution that confidential drafts often precede revisions, and market volatility—exemplified by recent fintech listings like Paytm's subdued debut—could influence pricing.

PhonePe's IPO preparations align with a resurgent Indian market, where 2025 has seen over 20 tech IPOs raising Rs 50,000 crore collectively, driven by post-pandemic digital acceleration. The company's confidential approach allows for iterative feedback from SEBI without public scrutiny, a strategy employed by peers like Swiggy and Zepto.

Promoters, including Walmart, may offload up to 10% stake via OFS to monetize gains, while fresh capital could fuel international forays into Southeast Asia and bolster compliance with data localization norms. Regulatory clarity on UPI incentives and RBI's push for account aggregators further enhance prospects, potentially mirroring Nykaa's 2021 success with 80x oversubscription.

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Yet, challenges loom: Intense competition from Paytm and Razorpay, coupled with cybersecurity risks highlighted by recent breaches, demands robust governance. PhonePe's 2024 revenue hit Rs 4,800 crore, with profitability achieved via cost optimizations, but scaling profitability remains key for investor appeal.

As SEBI reviews the draft, the fintech's listing could catalyze sector consolidation, offering retail investors entry into a unicorn that democratized payments for 500 million users. With festive season boosting transactions, PhonePe's IPO—expected in Q1 2026—promises to be a bellwether for India's startup maturation.

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