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, marking a crucial step towards the company’s listing on the Indian 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 result in a significant reduction in Walmart’s holding in PhonePe, which currently stands at a substantial percentage. The exact percentage of Walmart’s stake reduction will be determined after the IPO, and the proceeds from the issue will go entirely to the selling shareholders.
In addition to Walmart, smaller shareholders Microsoft and Tiger Global will fully exit their stakes in PhonePe through the IPO. This development marks a significant shift in the shareholding pattern of the company, as these investors will no longer hold any equity in PhonePe post-listing. The exit of Microsoft and Tiger Global is expected to result in a change in the company’s board composition, with new directors potentially being appointed to replace the outgoing representatives of these investors.
The updated DRHP filing comes after PhonePe initially submitted its draft papers with SEBI in July 2023. The company’s decision to refile its IPO papers is reportedly due to changes in the market conditions and the need to update its financials and valuation. The IPO is expected to be one of the largest in India’s fintech space, with PhonePe aiming to raise significant funds to fuel its growth plans and expand its services.
PhonePe’s decision to go public is seen as a strategic move to unlock value for its shareholders and provide liquidity to its investors. The company has been growing rapidly in recent years, driven by the increasing adoption of digital payments in India. With its strong brand presence and extensive user base, PhonePe is well-positioned to capitalize on the growing demand for digital payment services in the country.
The IPO is expected to be a landmark event in India’s fintech space, with PhonePe’s listing likely to set a benchmark for other digital payment companies in the country. The company’s valuation is expected to be significant, with estimates suggesting that PhonePe could be valued at over $10 billion post-listing.
The exit of Microsoft and Tiger Global from PhonePe is not surprising, given the company’s growth trajectory and the increasing interest from strategic investors. Both Microsoft and Tiger Global have been early backers of PhonePe, and their investment in the company has yielded significant returns. The exit of these investors will provide an opportunity for new investors to participate in PhonePe’s growth story and benefit from the company’s future prospects.
In conclusion, PhonePe’s updated DRHP filing marks a significant milestone in the company’s journey towards listing on the Indian stock exchanges. With Walmart reducing its stake and Microsoft and Tiger Global exiting their stakes, the IPO is expected to result in a significant change in the company’s shareholding pattern. As PhonePe prepares to go public, the company is well-positioned to capitalize on the growing demand for digital payment services in India and unlock value for its shareholders.
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