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 partially monetize 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 2018, and has since then been supporting the growth of the digital payments platform.
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 larger funding round that also saw participation from other investors such as Flipkart and Tencent. Tiger Global, a well-known venture capital firm, had also invested in PhonePe in 2016, as part of the company’s early funding rounds.
The exit of Microsoft and Tiger Global from PhonePe’s shareholder list is seen as a positive development for the company, as it will help to simplify the shareholder structure and reduce the number of external stakeholders. This, in turn, is expected to provide greater flexibility to PhonePe’s management team to take strategic decisions and drive the company’s growth plans.
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 grown rapidly over the past few years, driven by the increasing adoption of digital payments in India. The company has a strong presence in the Indian market, with over 300 million registered users and a network of over 20 million merchants.
PhonePe’s IPO plans have been in the works for several months, with the company having first filed its draft red herring prospectus with SEBI in July 2022. However, the company had to refile its prospectus due to changes in its shareholder structure and other developments. The updated DRHP filed by PhonePe provides a detailed overview of the company’s business, financial performance, and growth plans, and is expected to help investors make informed decisions about participating in the IPO.
The IPO of PhonePe is expected to be a landmark event in India’s technology sector, and is seen as a significant milestone for the company. With its strong brand, large user base, and growing revenue streams, PhonePe is well-positioned to drive growth and expansion in the Indian digital payments market. The company’s plans to list on the Indian stock exchanges are expected to provide a boost to the country’s technology sector, and are seen as a positive development for the Indian economy as a whole.
In conclusion, the filing of updated IPO papers by PhonePe is a significant development for the company and the Indian technology sector as a whole. The exit of Microsoft and Tiger Global, and the partial reduction of Walmart’s stake, are seen as positive developments that will help to simplify the shareholder structure and provide greater flexibility to the company’s management team. With its strong brand, large user base, and growing revenue streams, PhonePe is well-positioned to drive growth and expansion in the Indian digital payments market, and its IPO is expected to be a landmark event in the country’s technology sector.
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