Giant fintech company is going to launch a big IPO; Valuation Rs 96,890 crore!
PhonePe, the company that dominates the world of UPI transactions in India, is now preparing to enter the stock market. This Walmart-invested company is aiming to be listed at a valuation of $9 billion to $10.5 billion. Although this is slightly lower than its previous valuation of $12 billion in 2023, it could still prove to be the second largest IPO in Indian fintech history. The company is planning to raise approximately $1 billion (92.1730 Indian rupees) through this IPO, which is targeted to be completed by April 2026.
Big things related to IPO: Who is selling his stake?
According to PhonePe’s IPO filing, no new shares will be issued in this offer. Instead, existing investors will sell their stakes:
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Walmart: Will reduce its stake by about 12%.
Tiger Global and Microsoft: Both these giant companies are planning to exit PhonePe completely.
The three companies together will put a total of 50.7 million shares for sale in the market.
Market position: Competition from Google Pay and Paytm
This will be the second largest fintech IPO of PhonePe, after Paytm’s $20 billion IPO. Currently PhonePe has more than 65 crore registered users. According to January data, out of the total 21.7 billion UPI transactions in India, PhonePe alone processed about 10 billion transactions.
Monetization still a question
In India, the government has not allowed charging any fees on UPI transactions, due to which it is difficult to earn profit in payment business.
– PhonePe’s loss widened to Rs 1,444 crore in the half year ended September, compared to Rs 1,203 crore last year.
– Although the company’s revenue has increased by 22% to Rs 3,918 crore, investors are still questioning the company’s earning capacity.
What is the opinion of experts?
Market experts say that the enthusiasm in India’s fintech sector has reduced a bit. Investors are worried whether PhonePe will be able to earn profits from its active users through other services (like insurance or loans)? Additionally, global situations like the Middle East conflict may also impact the timing of the IPO.
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