PhonePe Becomes Public Company Ahead of Its Anticipated IPO Launch

In a major milestone towards its public debut, PhonePe, India’s largest digital payments platform, has officially converted itself from a private limited company to a public limited entity. As per the latest filings with the Registrar of Companies (RoC), the company is now known as PhonePe Limited, shedding its previous title of PhonePe Private Limited.

The resolution for this change was passed during an extraordinary general meeting held on April 16.

This transformation is a legally mandated move for any private company intending to list on the stock market. The updated incorporation certificate will be issued by the Central Processing Centre under the Ministry of Corporate Affairs.

PhonePe Prepares for IPO in 2024

According to industry insiders, PhonePe is gearing up to list on Indian stock exchanges within this year itself. The Bengaluru-headquartered fintech major is reportedly aiming for a valuation of approximately $15 billion, up from its last-known valuation of around $12 billion.

To initiate the IPO process, PhonePe has onboarded a group of top-tier investment banks including Kotak Mahindra Capital, JP Morgan, Citi, and Morgan Stanley.

Walmart-Backed Fintech Giant

Backed by retail behemoth Walmart, PhonePe is one of the most dominant players in India’s fintech space. It commands a nearly 50% share in the Unified Payments Interface (UPI) market, making it the top digital payments company in the country.

"PhonePe, our fintech business, is making preparations for an IPO in India. Our PhonePe team has long aspired to be a public company and we are excited to be taking these early steps," said Doug McMillon, CEO of Walmart.

Other major investors in PhonePe include Microsoft, General Atlantic, Tiger Global, Ribbit Capital, TVS Capital, Tencent, and the Qatar Investment Authority.

Strong Financial Growth in FY24

In the financial year 2023-24 (FY24), PhonePe recorded a robust 73% year-on-year jump in revenue, reaching Rs 5,064 crore. This growth is attributed to cost efficiency and product diversification. The company also turned profitable, reporting an adjusted profit after tax of Rs 197 crore, a significant improvement from a loss of Rs 738 crore in the previous fiscal year.

Relocation and Industry Movement

PhonePe had earlier moved its domicile from Singapore to India in December 2022, a crucial step in aligning with Indian regulatory frameworks and preparing for a domestic listing.

This move by PhonePe mirrors a broader trend among fintech companies. Just earlier this week, another major player, Razorpay, also converted into a public company in preparation for its own IPO.

Apart from PhonePe and Razorpay, other prominent Indian startups such as Urban Company, Shiprocket, Lenskart, and Pine Labs are also expected to hit the public markets in the near future.

Conclusion

PhonePe's transition from a private to a public entity marks a significant milestone in its journey towards becoming one of India’s most influential fintech players. As the leading UPI-based digital payments platform, accounting for nearly 50% of India’s transactions, PhonePe's move to list on the stock market reflects its maturity and readiness to operate in a more regulated, transparent environment.

Backed by Walmart and other major global investors like Microsoft, Tiger Global, and General Atlantic, the company is expected to target a robust valuation of $15 billion. Its strong revenue growth of 73% year-on-year and a shift from loss to profit in FY24 signals strong financial health and business resilience.

With top investment banks onboard to lead the IPO process, and other major startups like Razorpay and Lenskart following suit, PhonePe’s public listing could be a game-changer, further boosting investor confidence in India’s booming digital economy. The stage is now set for a high-profile IPO.