PhonePe files updated IPO papers, Microsoft, Tiger Global to exit
In a significant development, PhonePe, one of India’s leading digital payments companies, has filed its updated draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO). The issue will be entirely an offer for sale of 5.06 crore equity shares by existing shareholders, including Walmart, Microsoft, and Tiger Global.
According to the updated DRHP, Walmart, the largest shareholder in PhonePe, will reduce its stake in the payments firm by around 9%. This move is seen as a strategic decision by Walmart to unlock value from its investment in PhonePe, while still maintaining a significant stake in the company. Walmart had acquired a majority stake in PhonePe’s parent company, Flipkart, in 2018, and has since then been supportive of PhonePe’s growth and expansion plans.
On the other hand, smaller shareholders Microsoft and Tiger Global will fully exit their stakes in PhonePe through the IPO. This move is not surprising, given that both Microsoft and Tiger Global are venture capital investors who typically look to exit their investments after a certain period of time. Microsoft had invested in PhonePe in 2020, while Tiger Global had invested in the company in 2016.
The IPO is expected to be a significant event in the Indian capital markets, given PhonePe’s dominant position in the digital payments space. PhonePe has been at the forefront of India’s digital payments revolution, with its platform enabling millions of users to make payments, transfer money, and access various financial services.
The company’s growth has been impressive, with its user base and transaction volumes increasing rapidly over the past few years. PhonePe’s revenue has also been growing consistently, driven by its increasing market share and the growing adoption of digital payments in India.
The IPO will provide an opportunity for investors to participate in PhonePe’s growth story, while also giving existing shareholders a chance to monetize their investments. The issue is expected to be priced competitively, given the strong demand for digital payments companies in the Indian market.
The updated DRHP filing is a significant milestone for PhonePe, which has been working towards an IPO for several months now. The company had initially filed its DRHP with SEBI in July 2022, but had to update its filing to reflect changes in its shareholder structure and financial performance.
PhonePe’s IPO plans are seen as a positive development for the Indian startup ecosystem, which has been witnessing a surge in IPO activity in recent times. The company’s listing is expected to provide a boost to the Indian capital markets, while also demonstrating the potential for Indian startups to scale and go public.
In conclusion, PhonePe’s updated DRHP filing is a significant development for the company and its shareholders. The IPO will provide an opportunity for investors to participate in PhonePe’s growth story, while also giving existing shareholders a chance to monetize their investments. With its strong market position and growing revenue, PhonePe is well-placed to capitalize on the growing demand for digital payments in India.
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