PhonePe files updated IPO papers, Microsoft, Tiger Global to exit
In a significant development, PhonePe, a leading digital payments company in India, 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 partially monetize its investment in PhonePe, while still maintaining a significant stake in the company. Walmart had acquired a majority stake in PhonePe in 2016, as part of its acquisition of Flipkart, an Indian e-commerce company.
On the other hand, smaller shareholders Microsoft and Tiger Global will fully exit their stakes in PhonePe through the IPO. This move is likely to provide a significant return on investment for both Microsoft and Tiger Global, which had invested in PhonePe in earlier rounds of funding. The exit of these investors is seen as a positive development for PhonePe, as it will allow the company to bring in new investors and provide an opportunity for existing shareholders to partially monetize their investments.
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 the digital payments revolution in India, with its platform enabling users to make payments, transfer money, and pay bills, among other services. The company has seen rapid growth in recent years, driven by the increasing adoption of digital payments in India.
The updated DRHP filed by PhonePe provides detailed information about the company’s financial performance, business operations, and future plans. The document reveals that PhonePe has seen significant growth in its revenue and user base over the past few years. The company’s revenue has grown from Rs 370 crore in FY20 to Rs 1,646 crore in FY23, representing a compound annual growth rate (CAGR) of 133%.
PhonePe’s user base has also seen rapid growth, with the company reporting 355 million registered users as of March 2023. The company’s platform has enabled over 10 billion transactions in the past year, with a total payment value of over Rs 10 lakh crore.
The IPO is expected to provide a significant boost to PhonePe’s growth plans, as the company looks to expand its services and increase its user base. The company plans to use the proceeds from the IPO to invest in new technologies, enhance its platform, and expand its services to new markets.
The development is also seen as a positive sign for the Indian startup ecosystem, which has seen a significant increase in IPO activity in recent years. The IPO of PhonePe is expected to provide a benchmark for other digital payments companies in India, which are looking to raise funds through public markets.
In conclusion, the filing of updated IPO papers by PhonePe is a significant development for the Indian digital payments space. The company’s decision to raise funds through an IPO is seen as a strategic move to bring in new investors, provide an opportunity for existing shareholders to partially monetize their investments, and invest in new technologies and services. With its dominant position in the digital payments space, PhonePe is well-positioned to capitalize on the growing demand for digital payments in India.
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