Walmart-backed PhonePe plans IPO valuation of up to $10.5 billion amid monetisation concerns, says report

PhonePe Aims for IPO Valuation of $9-10.5 Billion

Walmart-backed Indian fintech firm PhonePe is planning to list at a valuation of $9 billion to $10.5 billion, according to a recent report by Reuters, citing two people with direct knowledge of the matter.

Walmart to Reduce Stake in PhonePe

• Walmart will reduce its stake in PhonePe by around 12% during the firm's initial public offering.
• Tiger Global and Microsoft plan to divest their holdings in PhonePe.

The three companies plan to sell approximately 50.7 million shares in the offering, while PhonePe will not issue any additional shares.

PhonePe IPO Details

• PhonePe filed for IPO in September and plans to conclude the process by April.
• The listing would rank as India's second-largest fintech IPO, after Paytm's approximately $20 billion listing in 2021.
• PhonePe's listing would surpass Paytm's current market capitalisation of $7.1 billion.

About PhonePe

• PhonePe has over 650 million registered users.
• PhonePe handled nearly 10 billion of the 21.7 billion transactions on India's unified payments interface (UPI) in January.
• Payments in India remain a low-margin business.

Key Financials

• PhonePe's losses increased to 14.44 billion rupees ($158 million) in the six months ending 30 September.
• Revenue grew approximately 22% to 39.18 billion rupees.

Investor Concerns

Two portfolio managers expressed ongoing concerns about PhonePe's capability to monetise its user base.

• Monetisation remains a question mark.
• Active users aren't growing at the same pace.
• Investors view India's fintech market as overcrowded and lacking significant differentiation among the players.