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, according to the updated filing.
The IPO will see Walmart, the largest shareholder in PhonePe, reduce its stake in the payments firm by around 9%. On the other hand, smaller shareholders Microsoft and Tiger Global will fully exit their stakes in the company. This move is expected to provide a liquidity event for these investors, who have been backing PhonePe since its early days.
The updated DRHP filing comes after PhonePe’s initial filing in July 2022, which was subsequently updated in October 2022. The company has been working towards an IPO for some time now, and the latest filing suggests that it is making progress towards achieving this goal.
PhonePe’s decision to go public is a significant milestone for the Indian fintech industry, which has seen tremendous growth in recent years. The company has been at the forefront of this growth, with its mobile payments app becoming one of the most widely used in the country. The IPO is expected to provide PhonePe with the necessary funds to further expand its operations and strengthen its position in the market.
The offer for sale will see existing shareholders, including Walmart, Microsoft, and Tiger Global, sell their shares to the public. The IPO will not involve any fresh issuance of shares by PhonePe, which means that the company will not receive any direct proceeds from the issue. However, the listing is expected to provide a liquidity event for the company’s shareholders and help to increase its visibility and credibility in the market.
Walmart, which acquired a majority stake in PhonePe in 2018, will reduce its stake in the company by around 9% through the IPO. The retail giant has been a significant backer of PhonePe, and its continued support is expected to be a major positive for the company. Microsoft and Tiger Global, on the other hand, will fully exit their stakes in PhonePe, marking the end of their investment journey in the company.
The exit of Microsoft and Tiger Global is not surprising, given that both investors have been looking to monetize their investments in PhonePe. The IPO provides a convenient exit opportunity for these investors, who can now sell their shares to the public and realize a return on their investment.
The IPO is expected to be a significant event for the Indian capital markets, with PhonePe being one of the most highly anticipated listings in recent years. The company’s strong brand recognition, large user base, and growing revenue trajectory make it an attractive investment opportunity for investors. The listing is also expected to provide a boost to the Indian fintech industry, which has been growing rapidly in recent years.
In conclusion, PhonePe’s updated DRHP filing is a significant development for the company and the Indian fintech industry. The IPO will provide a liquidity event for existing shareholders, including Walmart, Microsoft, and Tiger Global, and help to increase the company’s visibility and credibility in the market. With its strong brand recognition and growing revenue trajectory, PhonePe is well-positioned to capitalize on the growth opportunities in the Indian digital payments market.
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