Walmart-Backed PhonePe Seeks Up to $10.5 Billion Valuation in Planned IPO

PhonePe IPO: Walmart-Backed Fintech Firm Plans $9 Billion Listing

PhonePe, an Indian fintech firm backed by Walmart, is planning to list on the market at a valuation of $9 billion to $10.5 billion, according to reports. This would result in the company generating approximately $900 million to $1.05 billion from the IPO.

Walmart is expected to reduce its stake in PhonePe by around 12% during the initial public offering (IPO), while Tiger Global and Microsoft will also divest their holdings. The three companies plan to sell approximately 50.7 million shares in the offering, with PhonePe not issuing any additional shares.

PhonePe filed for its IPO in September 2023 and aims to conclude the process by April 2024, although this timeline may change based on capital market conditions. The listing would rank as India's second-largest fintech IPO, after Paytm's approximately $20 billion listing in 2021.

Read also: SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire

Key Financials

• Revenue: grew approximately 22% to 39.18 billion rupees in the six months ending 30 September.
• Losses: increased to 14.44 billion rupees ($158 million) in the six months ending 30 September, up from 12.03 billion rupees a year earlier.
• User Base: PhonePe has over 650 million registered users and handled nearly 10 billion of the 21.7 billion transactions on India's unified payments interface (UPI) in January.

Challenges Ahead

• Monetisation: investors have expressed ongoing concerns about PhonePe's capability to monetise its user base.
• Overcrowded Market: India's fintech market is viewed as overcrowded and lacking significant differentiation among players.
• Valuation: the IPO valuation is lower than PhonePe's previous funding round of $12 billion in 2023.

Read also: SMR Jewels IPO Successfully Lists with Institutional Support