PhonePe files updated IPO papers, Microsoft, Tiger Global to exit
The Indian startup ecosystem has been abuzz with the news of PhonePe, a leading digital payments platform, filing 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 development marks a significant milestone in the company’s journey, as it prepares to list its shares on the Indian stock exchanges. In this blog post, we will delve into the details of the IPO, the existing shareholders’ plans, and the implications of this move on the Indian startup ecosystem.
PhonePe, which was acquired by Walmart in 2018, has been a key player in the Indian digital payments market, competing with the likes of Paytm, Google Pay, and Amazon Pay. The company has been steadily expanding its services, offering a range of payment options, including UPI, credit and debit cards, and net banking. With over 300 million registered users, PhonePe has established itself as one of the leading digital payments platforms in the country.
The IPO, which is expected to be one of the largest in recent times, will be an entirely offer for sale (OFS) of 5.06 crore equity shares by existing shareholders. This means that the company will not be raising any fresh capital through the IPO, but rather, the existing shareholders will be selling their stakes to the public. The OFS will see Walmart, the majority shareholder, reducing its stake in the company by around 9%. This move is seen as a strategic decision by Walmart to unlock value from its investment in PhonePe, while still maintaining a significant stake in the company.
However, the bigger news is the exit of smaller shareholders, Microsoft and Tiger Global, from the company. Both Microsoft and Tiger Global have been early investors in PhonePe and have been instrumental in shaping the company’s growth strategy. Their exit from the company is seen as a significant development, as it marks the end of their association with PhonePe. While Microsoft and Tiger Global will be fully exiting their stakes, other existing shareholders, including Flipkart’s founders, Sachin Bansal and Binny Bansal, will also be selling a portion of their stakes.
The IPO is expected to be a blockbuster listing, with many investors and analysts expecting the company to be valued at over $10 billion. The listing will provide a significant opportunity for investors to participate in the growth story of PhonePe, which has been one of the fastest-growing digital payments platforms in the country. The company’s financials have been impressive, with revenues growing at a rapid pace over the past few years.
The IPO will also provide a significant boost to the Indian startup ecosystem, which has been witnessing a surge in funding and investment activity in recent times. The listing of PhonePe will be seen as a landmark event, as it will be one of the first major digital payments companies to list on the Indian stock exchanges. This is expected to pave the way for other startups to follow suit, providing a new avenue for investors to participate in the growth story of Indian startups.
In conclusion, the filing of the updated DRHP by PhonePe marks a significant milestone in the company’s journey, as it prepares to list its shares on the Indian stock exchanges. The IPO, which will see Walmart reducing its stake by around 9% and Microsoft and Tiger Global exiting their stakes, is expected to be a blockbuster listing. With its impressive financials and rapid growth, PhonePe is well-positioned to capitalize on the growing demand for digital payments in India. As the company prepares to list its shares, it will be interesting to see how investors respond to the IPO, and how the listing will impact the Indian startup ecosystem.
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