Digital payments giant PhonePe, controlled by retail behemoth Walmart, has taken a significant step toward its much-anticipated initial public offering by filing an updated Draft Red Herring Prospectus with the Securities and Exchange Board of India. This move sets the stage for what could become one of India's largest fintech public offerings, arriving amidst a period of notable market turbulence and a crowded IPO pipeline.
IPO Details and Shareholder Exit
The proposed IPO is expected to be valued in the range of Rs 12,000 to Rs 13,000 crore, positioning it as the second-largest fintech IPO in the country after Paytm. Notably, the offering will consist entirely of an offer-for-sale of 5.06 crore equity shares by existing shareholders, meaning PhonePe itself will not receive any proceeds from the sale.
Major Stakeholders Reducing Holdings
The primary seller is WM Digital Commerce Holdings, a promoter entity owned by Walmart International Holdings Inc., which currently holds a commanding 71.77% stake in PhonePe. Walmart plans to sell 4.59 crore shares, representing approximately 9.06% of the company's total paid-up equity.
Additionally, investors Tiger Global PIP 9-1 and Microsoft Global Finance Unlimited Company, an Irish subsidiary of Microsoft Corporation, will collectively offload the remaining 47.17 lakh shares. According to the updated DRHP dated January 21, 2026, the selling shareholders will be entitled to the entire proceeds after deducting offer expenses and applicable taxes.
PhonePe's Market Position and Financial Performance
PhonePe currently dominates India's digital payments landscape as the largest platform, followed closely by Google Pay. As of September 2025, it commanded an impressive 46.85% UPI volume market share according to NPCI data, having emerged as the leader in merchant UPI transactions back in April 2020.
Revenue Growth Amidst Persistent Losses
The company has demonstrated substantial revenue growth from payment services, reporting:
- Rs 3,405.86 crore for the six-month period ended September 30, 2025
- Rs 2,961.32 crore for the six-month period ended September 30, 2024
- Rs 6,497.94 crore for fiscal year 2025
- Rs 4,858.34 crore for fiscal year 2024
- Rs 2,845.97 crore for fiscal year 2023
However, PhonePe continues to grapple with significant financial challenges. The DRHP reveals a history of net losses and negative cash flows from operating activities:
- Restated losses of Rs 1,444.42 crore and Rs 1,203.21 crore for the six-month periods ended September 30, 2025 and 2024 respectively
- Annual losses of Rs 1,727.41 crore, Rs 1,996.17 crore, and Rs 2,796.07 crore for fiscal years 2025, 2024, and 2023
- Negative net cash flows from operating activities of Rs 117.27 crore, Rs 629.15 crore, and Rs 768.25 crore for recent periods
The company has cautioned investors that it may continue to incur losses and negative cash flows in the future, which could adversely affect operations and growth plans.
Founding Journey and Current Ownership
PhonePe was originally founded by Sameer Nigam, Rahul Chari, and Burzin Engineer. Following its establishment, e-commerce giant Flipkart acquired the company in 2016. Walmart later became the majority owner through its acquisition of Flipkart, providing substantial support for PhonePe's expansion across India's rapidly growing fintech market.
Challenging Market Environment
PhonePe is entering the public markets during a period of heightened volatility marked by geopolitical tensions, trade uncertainties, and significant global developments. The benchmark Sensex has declined by 4.47%, settling at 82,307.37 from its 52-week high of 86,159.02.
Crowded IPO Pipeline for 2026
After a record-breaking 2025 that saw India's primary market raise Rs 1.75 lakh crore, the IPO pipeline shows no signs of slowing. According to PRIME Database, approximately Rs 1.40 lakh crore worth of IPOs are awaiting SEBI approval for 2026, with another Rs 1.25 lakh crore already cleared and waiting to debut on the bourses.
A diverse range of companies across sectors including financial services, manufacturing, consumer goods, technology, and infrastructure are preparing to tap the markets, with total fundraising estimated at around Rs 2.65 lakh crore. Of the 202 companies currently in the pipeline, only seven are new-age technology firms, collectively seeking approximately Rs 22,500 crore.
Despite their relatively small representation in the overall pipeline, these technology companies continue to attract significant investor interest both domestically and globally, driven by their scalability and potential for exponential growth in India's digital economy.
