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, according to the updated DRHP.
The move is seen as a crucial step towards PhonePe’s listing on the Indian stock exchanges, which is expected to be one of the most highly anticipated IPOs in the country. The company’s decision to file updated IPO papers comes after it received SEBI’s approval for its initial draft papers in September last year.
As per the updated DRHP, Walmart, the largest shareholder in PhonePe, will reduce its stake in the payments firm by around 9%. Walmart had acquired a majority stake in PhonePe in 2018 as part of its acquisition of Flipkart, India’s largest e-commerce company. The reduction in stake is seen as a strategic move by Walmart to unlock value for its shareholders while still maintaining a significant stake in PhonePe.
On the other hand, smaller shareholders Microsoft and Tiger Global will fully exit their stakes in PhonePe through the IPO. Microsoft had invested in PhonePe in 2020, while Tiger Global had invested in the company in 2016. The exit of these investors is seen as a positive development for PhonePe, as it will help the company to simplify its shareholder structure and reduce the number of investors.
The IPO is expected to be a significant event in the Indian capital markets, as PhonePe is one of the largest and most successful digital payments companies in the country. The company has a strong track record of growth and has been expanding its services to include a range of financial products, including insurance, lending, and investments.
PhonePe’s decision to file updated IPO papers comes at a time when the Indian IPO market is witnessing a significant surge in activity. Several companies, including tech startups and traditional businesses, have filed their IPO papers with SEBI in recent months, and many more are expected to follow suit in the coming months.
The development is also seen as a positive sign for the Indian startup ecosystem, which has been witnessing a significant surge in funding and investment activity in recent years. PhonePe’s IPO is expected to provide a significant boost to the ecosystem, as it will help to demonstrate the viability of Indian startups and their ability to create value for investors.
In terms of financial performance, PhonePe has reported significant growth in its revenue and user base in recent years. The company’s revenue has grown from Rs 1,646 crore in FY20 to Rs 5,264 crore in FY22, representing a compound annual growth rate (CAGR) of 124%. The company’s user base has also grown significantly, with over 300 million registered users as of March 2022.
Overall, PhonePe’s decision to file updated IPO papers is a significant development for the Indian capital markets and the startup ecosystem. The company’s IPO is expected to be a highly anticipated event, and its success will depend on a range of factors, including market conditions, investor sentiment, and the company’s financial performance.
As the Indian IPO market continues to evolve and grow, it will be interesting to see how PhonePe’s IPO performs and what impact it will have on the broader market. One thing is certain, however: PhonePe’s IPO will be a significant event that will be closely watched by investors, analysts, and industry observers.
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