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 value from its investment in PhonePe, while still maintaining a significant stake in the company. Walmart had acquired a majority stake in PhonePe in 2018, as part of its acquisition of Flipkart, India’s largest e-commerce company.
On the other hand, smaller shareholders Microsoft and Tiger Global will fully exit their stakes in PhonePe through the IPO. Microsoft had invested in PhonePe in 2020, as part of a funding round that valued the company at around $2.5 billion. Tiger Global, a prominent venture capital firm, had also invested in PhonePe in 2016, when the company was still in its early stages.
The exit of Microsoft and Tiger Global from PhonePe is seen as a positive development for the company, as it will allow the payments firm to simplify its shareholder structure and reduce the number of investors with smaller stakes. This, in turn, is expected to make it easier for PhonePe to take strategic decisions and execute its business plans more efficiently.
The IPO of PhonePe is expected to be one of the largest in India’s technology sector, and is seen as a significant milestone for the company. PhonePe has been growing rapidly in recent years, driven by the increasing adoption of digital payments in India. The company has a strong presence in the Indian payments market, with a user base of over 300 million and a network of over 20 million merchants.
The updated DRHP filed by PhonePe provides detailed information about the company’s financials, business operations, and growth plans. According to the document, PhonePe has reported significant revenue growth in recent years, driven by the increasing adoption of digital payments in India. The company has also made significant investments in technology and infrastructure, to support its growth plans and improve the user experience.
The IPO of PhonePe is expected to be closely watched by investors and industry analysts, as it will provide a benchmark for the valuation of Indian technology companies. The issue is expected to be priced competitively, given the strong demand for Indian technology stocks and the company’s growth prospects.
In conclusion, the filing of updated IPO papers by PhonePe is a significant development for the company and the Indian technology sector. The exit of Microsoft and Tiger Global, and the reduction of Walmart’s stake, are seen as positive developments for the company, as they will simplify the shareholder structure and reduce the number of investors with smaller stakes. The IPO of PhonePe is expected to be a landmark event in the Indian technology sector, and is seen as a significant milestone for the company.
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