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 largest shareholder in PhonePe, will reduce its stake in the payments firm by around 9%. This move is expected to bring in significant funds for the retail giant, which has been a major backer of PhonePe since its acquisition in 2016. The reduction in stake will also lead to a slight dilution in Walmart’s control over the company, although it will still remain the largest shareholder.
On the other hand, smaller shareholders Microsoft and Tiger Global will fully exit their stakes in PhonePe through the IPO. Both Microsoft and Tiger Global have been early investors in PhonePe and have played a crucial role in the company’s growth and expansion. Their exit will mark the end of their association with the company, which has grown to become one of the largest digital payments platforms in India.
The updated DRHP filing is a significant milestone for PhonePe, which has been working towards an IPO for several months. The company had initially filed its DRHP in July 2023, but had to refile the documents after making some changes to its shareholder structure and financials. The IPO is expected to be one of the largest in the Indian market, with PhonePe looking to raise funds to further expand its operations and strengthen its market position.
PhonePe’s decision to go public comes at a time when the Indian digital payments market is witnessing rapid growth, driven by increasing adoption of online transactions and government initiatives to promote digital payments. The company has been a major beneficiary of this trend, with its user base and transaction volumes growing rapidly over the past few years.
The IPO will provide an opportunity for investors to participate in the growth story of PhonePe, which has established itself as a leader in the digital payments space. The company’s strong brand, large user base, and robust technology platform make it an attractive investment opportunity, and the IPO is expected to generate significant interest among investors.
In terms of financials, PhonePe has reported significant growth in its revenue and user base over the past few years. The company’s revenue has grown from Rs 1,100 crore in FY20 to Rs 2,500 crore in FY22, driven by increasing adoption of digital payments and expansion of its services. The company’s user base has also grown rapidly, with over 300 million registered users on its platform.
The IPO will be managed by a consortium of investment banks, including Goldman Sachs, Morgan Stanley, and ICICI Securities. The issue will be open for subscription for a period of three days, during which investors can bid for the shares. The IPO is expected to be priced in the range of Rs 800-1,000 per share, although the final price will be determined by the book-building process.
In conclusion, PhonePe’s updated DRHP filing marks a significant milestone for the company, which is preparing to go public through an IPO. The issue will provide an opportunity for investors to participate in the growth story of one of India’s leading digital payments platforms. With its strong brand, large user base, and robust technology platform, PhonePe is well-positioned for long-term growth and success. As the company prepares to list on the stock exchanges, it will be interesting to see how investors respond to the IPO and how the company performs in the public markets.
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