PhonePe files draft papers via confidential route ahead of likely IPO

Fintech startup reported 40% revenue growth and positive cash flows in FY25

Walmart-owned fintech firm PhonePe has filed draft papers with the Securities and Exchange Board of India (Sebi) via the confidential pre-filing route. The firm is looking at raising up to ₹12,000 crore, said sources in the know. The company will raise the funds through offer-for-sale (OFS) and will see Walmart, the promoter of the Bengaluru-based firm, also selling its share in the IPO. 

Some of the other investors in the company include Tiger Global, Microsoft, General Atlantic, Ribbit Capital, TVS Capital, Tencent, Qatar Investment Authority, according to Tracxn data.  

PhonePe has joined startup peers like Groww, Physics Wallah, and Imagine Marketing (Boat) in opting for the confidential IPO filing route. The confidential filing route allows companies to submit their draft red herring prospectus (DRHP) privately to Sebi, stock exchanges, and selectively market it to potential investors.  

Thus, companies shield sensitive financial and strategic details from the larger public eye until they’re ready to file the red herring prospectus (RHP), which is the precursor to the launch of the IPO.  

Meanwhile, PhonePe recorded ₹7,115 crore in revenue in 2024-25 (FY25), reflecting a 40 per cent year-on-year growth, according to regulatory filings with the Registrar of Companies.  

This was accompanied by the company turning free cash flow positive, with cash flow from operations amounting to ₹1,202 crore.  PhonePe continued to improve its bottom line, with adjusted earnings before interest, taxes, depreciation, and amortisation or Ebitda (excluding ESOP costs) more than doubling to ₹1,477 crore (from ₹652 crore in the prior year), and adjusted PAT (excluding ESOP costs) more than tripling to ₹630 crore (from ₹197 crore in the previous year).  

Walmart bought a controlling stake in Indian ecommerce giant Flipkart in 2018, giving it ownership of PhonePe. In October 2022, PhonePe moved its domicile from Singapore to India with an eye on domestic listing. Walmart incurred a tax expense of nearly $1 billion after it reverse flipped to India. The  separation of PhonePe from Flipkart was completed in 2022 with Walmart remaining a majority stakeholder in the digital payments major.  

 

The  separation of PhonePe from Flipkart was completed in 2022 with Walmart remaining a majority stakeholder in the digital payments major. 

 

Data shows that the company has raised a total of $1.01 billion in funding to date. 

 

Other listed digital payments providers in India are One97 Communications (Paytm) and One MobiKwik Systems.

 

“The company has filed the pre-filed draft red herring prospectus (PDRHP) with the Securities and Exchange Board of India and BSE Limited and the National Stock Exchange of India Limited in relation to the initial public offering of its equity shares, under Chapter IIA of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018,” PhonePe said in a statement. 

 

The company added that the ‘filing of the PDRHP shall not necessarily mean that the company will undertake the initial public offering’. 

 

Axis Capital, Citigroup, Goldman Sachs, JP Morgan, Kotak, and Morgan Stanley are the investment banks handling the share sale.

 

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