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, as per the updated DRHP. This move is expected to provide a liquidity exit to some of the company’s existing shareholders, while also giving PhonePe the opportunity to list its shares on the stock exchanges.
The updated DRHP reveals that Walmart, the largest shareholder in PhonePe, will reduce its stake in the payments firm by around 9%. This is a significant development, as Walmart has been a key backer of PhonePe since its acquisition of Flipkart, the parent company of PhonePe, in 2018. The reduction in stake by Walmart is likely to be seen as a positive move, as it will allow other investors to participate in the growth story of PhonePe.
In addition to Walmart, smaller shareholders Microsoft and Tiger Global will also fully exit their stakes in PhonePe through the IPO. This is not entirely surprising, as both Microsoft and Tiger Global have been investors in PhonePe for several years and may be looking to book profits on their investments. Microsoft, in particular, has been an early backer of PhonePe, and its exit may be seen as a vote of confidence in the company’s growth prospects.
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 been growing rapidly in recent years, driven by the increasing adoption of digital payments in India. PhonePe’s platform allows users to make payments, transfer money, and pay bills, among other services. The company has also been expanding its offerings to include other financial services, such as insurance and investments.
The updated DRHP does not disclose the price band for the IPO, but it is expected to be one of the largest IPOs in India in recent years. The issue is expected to be subscribed by a wide range of investors, including institutional investors, high net worth individuals, and retail investors. The IPO is also expected to provide a liquidity exit to PhonePe’s employees, who hold stock options in the company.
PhonePe’s decision to file an updated DRHP is a significant development, as it indicates that the company is moving ahead with its plans to list its shares on the stock exchanges. The company had initially filed its DRHP in July 2023, but had to update it to reflect changes in its shareholding pattern and other developments. The updated DRHP provides more detailed information about the company’s financials, business, and growth prospects, which will help investors make informed decisions about participating in the IPO.
In conclusion, PhonePe’s decision to file an updated DRHP is a significant development, as it marks an important milestone in the company’s journey towards listing its shares on the stock exchanges. The IPO is expected to be a major event in the Indian capital markets, and will provide a liquidity exit to some of the company’s existing shareholders. With Walmart reducing its stake and Microsoft and Tiger Global exiting their stakes, the IPO is expected to be subscribed by a wide range of investors. As PhonePe continues to grow and expand its offerings, its IPO is likely to be closely watched by investors and industry observers alike.
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