PhonePe IPO delayed: Walmart-backed issue pauses plan amid geopolitical tension

Indian fintech major PhonePe has delayed its plans to go public, citing ongoing geopolitical tensions and volatility in the global capital markets, the company said in a statement.

“We sincerely hope for a swift return to peace in all the affected regions. We remain committed to a public listing in India,” Sameer Nigam, CEO of PhonePe, said.

The company said it will resume the listing process once there is some stability in the global capital markets.

About PhonePe IPO

Walmart-backed PhonePe is aiming to list at a valuation of $9–10.5 billion, a Reuters report stated, citing sources.

At the current valuation, PhonePe will raise about $900 million to $1.05 billion via the IPO. But even at the top end, the deal would mark a cut from the $12 billion valuation at which PhonePe last raised $100 million in private markets in 2023.

As per the report, Walmart will offload about 12% of its stake in PhonePe, while investors like Tiger Global Management and Microsoft may exit their stakes. Combined, the three firms will sell around 50.7 million shares in the offering, and PhonePe will not issue any new shares, the report added.

PhonePe’s listing would make it India’s second-largest fintech IPO, behind Paytm’s about $20 billion listing in 2021.

PhonePay revenue and losses

PhonePe has more than 650 million registered users and processed nearly ⁠10 billion of the 21.7 ⁠billion transactions on India’s unified payments interface (UPI) in January, regulatory data showed. But payments in India remain a low-margin business.

PhonePe’s IPO filings show that its losses widened to Rs 14.44 ‌billion ($158 million) in the six months ended September 30, from Rs 12.03 billion a year ago, while revenue rose about 22 per cent to Rs 39.18 billio

Market sentiment hit globally

Market sentiment has been hit worldwide due to the prolonged conflict in West Asia. Inflationary concerns over rising oil and energy prices pushed the currency to a record low of 92.47 against the US dollar on Friday.

Brent Crude is currently trading above the $100 per barrel mark, while the US benchmark for oil, West Texas Intermediate, is above the $95 per barrel mark.

As per data available on the National Stock Exchange of India for March 16, foreign institutional investors (FIIs) were net sellers of domestic equities worth Rs 8,775 crore.