PhonePe IPO

Strengths · 8

• 01Revenue from operations grew 73.77% in FY2024 and 40.50% in FY2025, from Rs 2,914.29 crore in FY2023 to Rs 7,114.86 crore in FY2025.
• 02Adjusted EBITDA turned positive, from a negative Rs 375.46 crore in FY2023 to Rs 651.88 crore in FY2024 and Rs 1,477.19 crore in FY2025, an adjusted EBITDA margin of 20.76%.
• 03The restated loss narrowed from Rs 2,796.07 crore in FY2023 to Rs 1,996.17 crore in FY2024 and Rs 1,727.41 crore in FY2025.
• 04Adjusted profit was Rs 630.45 crore in FY2025 and Rs 196.99 crore in FY2024, against an adjusted loss of Rs 738.76 crore in FY2023.
• 05The company had no borrowings in FY2023, FY2024 or FY2025, and a net worth of Rs 9,374.34 crore as of 31 March 2025.
• 06The life till date registered user base grew from 455.41 million in FY2023 to 657.56 million as of 30 September 2025, with 156.00 million daily active users.
• 07Customer total payment value grew from Rs 69.55 trillion in FY2023 to Rs 132.70 trillion in FY2025, and merchant total payment value from Rs 7.55 trillion to Rs 15.00 trillion.
• 08Revenue from Lending and Insurance Distribution services grew from Rs 28.05 crore in FY2023 to Rs 557.65 crore in FY2025, taking its share of revenue from operations from 0.96% to 7.84%.

Risks · 10

• 01The company has a history of net losses, with restated losses of Rs 1,727.41 crore in FY2025, Rs 1,996.17 crore in FY2024 and Rs 2,796.07 crore in FY2023, and Rs 1,444.42 crore in the six months ended 30 September 2025.
• 02Net cash used in operating activities was Rs 117.27 crore in the six months ended 30 September 2025, Rs 629.15 crore in FY2024 and Rs 768.25 crore in FY2023.
• 03Consumer Payments gave 63.34% of revenue from operations in FY2025 and payment services as a whole gave 91.33%, so the business rests on one revenue engine.
• 04NPCI's volume cap circular proposes a cap of 30% on the UPI transaction volume any single third party application provider may process. PhonePe's UPI volume market share was 46.85% as of 30 September 2025 and the cap stands deferred only until 31 December 2026.
• 05The company takes part in UPI through three sponsor payment system provider banks, Yes Bank Limited, Axis Bank Limited and ICICI Bank Limited, and any change in their commercial terms or any operational breakdown would hit the business.
• 06Adjusted EBITDA margin fell to 6.48% in the six months ended 30 September 2025 from 15.74% a year earlier, and adjusted EBIT was a negative Rs 313.83 crore in that half year.
• 07This is a pure offer for sale of up to 5,06,60,446 equity shares. The company will not receive any proceeds, and all three selling shareholders hold their shares at a weighted average cost of acquisition of Rs 1,996.80 per equity share.
• 08The company has filed 135 criminal proceedings involving Rs 24.08 crore, and faces three criminal, 16 tax and one material civil proceeding involving Rs 5.00 crore.
• 09The company has filed an adjudication application before the Registrar of Companies, Karnataka over share allotments made at a price lower than the price in its valuation reports.
• 10Operations are overseen by the RBI, SEBI, IRDAI, UIDAI and the Department of Telecommunications, and any non-compliance or change in rules can affect the business.

PhonePe Limited, formerly PhonePe Private Limited, is a technology company that builds digital platforms for payments services, digital distribution services and financial services. Through the PhonePe Platform it offers Consumer Payments, Merchant Payments, Lending Distribution and Insurance Distribution. It has also built two newer platforms: Share.Market, a stock broking and mutual funds distribution platform, and Indus AppStore, a mobile app marketplace. The company entered financial distribution services within the PhonePe Platform in 2020 and launched the two new platforms between 2023 and 2024. Its registered and corporate office is at Salarpuria Softzone, Outer Ring Road, Bangalore 560 103, Karnataka. PhonePe takes part in UPI as a third party application provider, and does so through three sponsor payment system provider banks, namely Yes Bank Limited, Axis Bank Limited and ICICI Bank Limited.

The platform is large. The life till date registered user base grew from 455.41 million in FY2023 to 618.40 million in FY2025 and 657.56 million as of 30 September 2025. Yearly active users were 420.74 million, monthly active users 301.29 million and daily active users 156.00 million as of 30 September 2025. On the merchant side, monthly active merchants were 11.11 million and daily active merchants 6.75 million. Customer transactions grew from 39.67 billion in FY2023 to 90.27 billion in FY2025, and customer total payment value from Rs 69.55 trillion to Rs 132.70 trillion. Merchant transactions grew from 15.81 billion to 42.66 billion and merchant total payment value from Rs 7.55 trillion to Rs 15.00 trillion. As of 30 September 2025 the company's UPI volume market share was 46.85%, as per NPCI data quoted in the Redseer Report.

Revenue from operations was Rs 7,114.86 crore in FY2025. The PhonePe Platform gave 99.17% of it. Consumer Payments brought in Rs 4,506.90 crore, or 63.34%, Merchant Payments Rs 1,991.04 crore, or 27.99%, and Lending and Insurance Distribution services Rs 557.65 crore, or 7.84%. The new platforms gave Rs 59.27 crore, or 0.83%. Total revenue from payment services was Rs 6,497.94 crore, which is 91.33% of revenue from operations. In Lending Distribution the company works as a lending service provider that distributes loans for bank and NBFC partners, and in Insurance Distribution it distributes insurance products, so it does not carry the credit or claims risk on its own books.

The company is still loss making. The restated loss narrowed from Rs 2,796.07 crore in FY2023 to Rs 1,996.17 crore in FY2024 and Rs 1,727.41 crore in FY2025, and was Rs 1,444.42 crore for the six months ended 30 September 2025. It had no borrowings in any of the three fiscal years and a net worth of Rs 9,374.34 crore as of 31 March 2025, which rose to Rs 9,539.02 crore as of 30 September 2025. It reported no contingent liabilities as of 30 September 2025. The face value of its shares was sub-divided from Rs 10 each to Rs 1 each in March 2025.

The promoters are WM Digital Commerce Holdings Pte. Ltd. and Wal-Mart International Holdings, Inc., both part of the Walmart group. WM Digital Commerce Holdings Pte. Ltd. holds 371,517,890 equity shares, which is 71.77% of the pre-offer paid up equity capital on a fully diluted basis. Microsoft Global Finance Unlimited Company holds 0.71% and Tiger Global PIP 9-1 Ltd. holds 0.20%, and all three are selling shareholders in this offer.

The industry

According to the Redseer Report quoted in the offer document, India's digital payments industry is growing fast on the back of smartphone adoption, affordable data and government work on digital public infrastructure. UPI transactions were 87% of consumer payment value in FY2025, and total consumer payments reached Rs 301 trillion, or US$3.5 trillion. Merchant payments are also expanding, helped by QR codes and payment devices. Total digital consumer payments are projected to grow at a CAGR of 15% to 18% through FY2030, with rising financial inclusion and deeper digital use in Tier 2 and smaller cities driving the growth. Within this market PhonePe held a UPI volume market share of 46.85% as of 30 September 2025, as per NPCI data quoted in the same report.

Customer concentration: The offer document does not give a top five customer concentration, because the platform serves a mass user base. The concentration sits in the revenue mix instead: Consumer Payments gave 63.34% of revenue from operations in FY2025 and payment services together gave 91.33%.