Tiger Global and Microsoft to Fully Exit PhonePe Ahead of Major IPO
In a significant development for India's fintech landscape, investment firm Tiger Global and tech giant Microsoft are set to completely exit their stakes in PhonePe as the Walmart-owned digital payments platform prepares for its highly anticipated debut on Dalal Street in the coming months. This move comes as PhonePe gears up for what promises to be one of the largest public offerings by an Indian startup.
Details of the Upcoming Public Offering
PhonePe, which will become the first Indian business from Walmart's portfolio to go public, is seeking to raise approximately Rs 12,000 crore (equivalent to $1.3 billion) through an offer for sale (OFS). According to updated draft IPO papers filed by PhonePe on Thursday, Walmart, which currently holds about 72% stake in the company, will be paring its shareholding by 10% in this initial public offering.
The combined exit of Tiger Global, Microsoft, and Walmart's partial divestment will involve the sale of approximately 5 crore shares. It's important to note that an OFS mechanism allows existing shareholders to offload their stakes and exit their investments, with no fresh capital flowing into the company's coffers.
Stakeholder Positions and Strategic Exits
Sources familiar with the discussions revealed that both Tiger Global and Microsoft held relatively small positions in PhonePe. Tiger Global currently maintains just a 0.2% stake, while Microsoft holds 0.7%. "Tiger Global and Microsoft held very small stakes in the company. As far as Tiger Global is concerned, they had invested in PhonePe through an old fund and they had to exit the investment. For Tiger Global, there was no choice but to sell," explained a person aware of the internal discussions.
This development follows another significant transaction from September 2025, when PhonePe co-founders Sameer Nigam and Rahul Chari sold stake worth Rs 3,937 crore (approximately $430 million) to global investment firm General Atlantic.
PhonePe's Journey and Market Position
Founded in 2015, PhonePe has emerged as a major player in India's competitive digital payments ecosystem, competing with established platforms including Paytm, Google Pay, and Amazon Pay. The company's growth trajectory received substantial momentum following the Indian government's demonetisation initiative in 2016, which accelerated the adoption of digital payment applications across the country.
The company's corporate journey includes several pivotal moments:
- Acquisition by Flipkart in 2016
- Integration into Walmart's portfolio after the US retailer acquired a controlling stake in Flipkart in 2018
- Relocation of its base from Singapore to India in 2022
- Completion of separation from Flipkart
PhonePe, last valued at an impressive $12 billion, had confidentially filed for its IPO in September last year. The upcoming public issue is poised to become the second-largest IPO floated by an Indian startup, trailing only behind Paytm's market debut in 2021.
This landmark IPO represents a significant milestone not just for PhonePe but for India's broader fintech ecosystem, demonstrating the maturation of homegrown digital payment platforms and their ability to attract substantial public market investment. The exit of prominent investors like Tiger Global and Microsoft, coupled with Walmart's strategic stake reduction, sets the stage for what could be one of the most closely watched market debuts of the year.
