Walmart acquires PhonePe

Walmart-backed PhonePe has received approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO). The strategic move aims to fortify its position in the competitive digital payments sector and provide avenues for its investors to partially exit their holdings.

PhonePe, headquartered in Bengaluru, aims to raise up to INR 12,000 crore through its public listing, positioning it as one of the largest digital economy IPOs in India. The offering will be primarily structured as an Offer for Sale. Key stakeholders, including Walmart, Tiger Global, and Microsoft, are expected to reduce their collective ownership by approximately 10 percent. Citi, Morgan Stanley, JP Morgan, and Kotak Mahindra Capital are advising on the IPO, which targets a market valuation near USD 15 billion.

Strategically, PhonePe's IPO is set to bolster its financial health, following a year marked by substantial growth. The company reported a 40.5 percent increase in operating revenue, reaching INR 7,115 crore for fiscal year 2025. Its adjusted profit, excluding employee stock ownership plan costs, surged nearly fivefold to INR 630 crore. This growth trajectory underpins the decision to capitalize on heightened investor interest in Indian fintech and secure additional capital for expansion.

In the broader context of India’s fintech landscape, PhonePe is poised to make a significant impact. It currently dominates the Unified Payments Interface (UPI) market with a 45 percent share, ahead of Google Pay's 35 percent. The UPI platform remains central to India’s digital payments infrastructure, handling more than 85 percent of transactions. PhonePe’s upcoming IPO follows a series of notable tech listings, including Paytm’s and Swiggy’s, signaling sustained investor appetite despite Paytm’s valuation decline since its listing.

The timeline for PhonePe's IPO now turns toward final preparations and market debut. Regulatory scrutiny remains a factor, and the company must address any outstanding compliance issues. If successful, it will set a precedent for future fintech offerings in India’s capital markets.