PhonePe files updated IPO papers, Microsoft, Tiger Global to exit
In a significant development, digital payments firm PhonePe 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, marking a crucial step towards the company’s listing on the stock exchanges.
As per the updated DRHP, Walmart, the majority shareholder in PhonePe, will reduce its stake in the payments firm by around 9%. This move is seen as a strategic decision to unlock value for its shareholders while maintaining a significant stake in the company. Walmart had acquired a majority stake in PhonePe in 2016, and since then, the company has witnessed significant growth and expansion.
On the other hand, smaller shareholders Microsoft and Tiger Global will fully exit their stakes in PhonePe through the IPO. This move is not entirely surprising, given the fact that both Microsoft and Tiger Global have been investors in PhonePe since its early days, and their exit is likely a result of their investment cycle coming to an end.
The IPO is expected to provide a liquidity event for PhonePe’s existing shareholders, including Walmart, Microsoft, and Tiger Global, while also providing an opportunity for new investors to participate in the company’s growth story. PhonePe has been one of the fastest-growing digital payments companies in India, with a strong presence in the country’s burgeoning fintech ecosystem.
The updated DRHP filing comes after PhonePe had initially filed its draft papers with SEBI in July 2022. The company had to refile its papers due to changes in its shareholder structure and other regulatory requirements. The IPO is expected to be one of the most highly anticipated listings in the Indian stock market, given PhonePe’s strong brand presence and market position.
PhonePe’s decision to go public is seen as a testament to the growing maturity of India’s fintech ecosystem. The company has been at the forefront of the digital payments revolution in India, with its platform enabling millions of users to make transactions, pay bills, and access various financial services.
The exit of Microsoft and Tiger Global from PhonePe is also seen as a positive development, as it will provide an opportunity for new investors to come on board and support the company’s future growth plans. Walmart’s decision to reduce its stake in PhonePe is also expected to have a positive impact on the company’s valuation, as it will lead to a more diversified shareholder base.
In recent years, PhonePe has expanded its offerings beyond digital payments to include a range of financial services, such as insurance, lending, and investments. The company has also partnered with various banks and financial institutions to offer its services to a wider audience.
The IPO is expected to provide PhonePe with the necessary capital to further expand its operations, invest in new technologies, and strengthen its market position. The company’s listing on the stock exchanges is also expected to provide a boost to the Indian fintech ecosystem, as it will demonstrate the viability of digital payments companies as a viable investment opportunity.
In conclusion, PhonePe’s decision to file its updated IPO papers with SEBI marks a significant milestone in the company’s journey. The exit of Microsoft and Tiger Global, coupled with Walmart’s decision to reduce its stake, is expected to have a positive impact on the company’s valuation and provide an opportunity for new investors to participate in its growth story. As the Indian fintech ecosystem continues to evolve, PhonePe’s listing on the stock exchanges is expected to be a major catalyst for the company’s future growth and expansion.
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