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, indicating that the company is not looking to raise fresh capital through the IPO.
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 unlock the value of its investment in PhonePe, which has grown significantly since its acquisition in 2016. Walmart had acquired a majority stake in PhonePe’s parent company, Flipkart, in 2016, and subsequently, PhonePe has become one of the leading digital payments players in India.
On the other hand, smaller shareholders Microsoft and Tiger Global will fully exit their stakes in PhonePe through the IPO. This move is seen as a positive development for the company, as it will help to simplify the shareholder structure and reduce the number of investors with smaller stakes. Microsoft and Tiger Global had invested in PhonePe in 2019, and their exit is seen as a strategic decision to realize their investments.
The IPO is expected to be one of the largest in recent times, with PhonePe looking to raise funds to further strengthen its position in the Indian digital payments market. The company has been growing rapidly, with its user base and transaction volumes increasing significantly over the past few years. PhonePe has also been expanding its services to include new features such as buy-now-pay-later, credit cards, and insurance products, which are expected to drive future growth.
The filing of the updated DRHP is seen as a positive development for the Indian startup ecosystem, as it demonstrates the maturity and growth of the digital payments sector in the country. PhonePe’s IPO is expected to set a benchmark for other digital payments companies in India, which are also looking to raise funds through public listings.
The Indian digital payments market has been growing rapidly, driven by the increasing adoption of digital technologies and the government’s push towards a less-cash economy. The market is expected to continue growing in the future, driven by the increasing demand for digital payments and the expansion of services to include new features such as credit and insurance products.
PhonePe’s IPO is expected to be a significant event in the Indian capital markets, with investors eagerly awaiting the listing of the company. The company’s growth prospects, strong user base, and expanding services are expected to attract investors, who are looking to invest in companies with strong growth potential.
In conclusion, PhonePe’s filing of the updated DRHP is a significant development, which demonstrates the growth and maturity of the digital payments sector in India. The IPO is expected to be one of the largest in recent times, with Walmart reducing its stake and Microsoft and Tiger Global exiting their stakes. The listing of PhonePe is expected to set a benchmark for other digital payments companies in India, which are also looking to raise funds through public listings.
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