PhonePe Gears Up for $15 Billion IPO, Enlists Top Global and Domestic Investment Banks
Walmart-owned digital payments leader PhonePe has reportedly selected four major investment banks, including global heavyweights and domestic players, to steer its highly anticipated initial public offering (IPO), targeting a valuation of up to $15 billion. According to a Moneycontrol report citing industry insiders, the Bengaluru-based firm plans to kickstart the IPO process as early as the first week of March, marking a significant milestone in India’s rapidly evolving tech listing landscape.
Banking Powerhouses Onboard
PhonePe has tapped Kotak Mahindra Capital, JP Morgan, Citigroup and Morgan Stanley as lead advisors for the offering, signaling its intent to balance local expertise with global reach. Sources suggest additional advisors could join the roster as the process advances. The selection of Kotak Mahindra, one of India’s top investment banks, alongside Wall Street titans underscores PhonePe’s strategy to attract both domestic and international investors.
Timing and Market Context
The IPO plans arrive amid a resurgence in India’s tech IPO market, with companies like Paytm, Zomato and Nykaa having debuted in recent years. However, PhonePe’s proposed $15 billion valuation would position it among the country’s most valuable homegrown fintech firms, rivaling the likes of Paytm’s current market cap. The company, which processes over 50% of India’s UPI (Unified Payments Interface) transactions, has seen exponential growth since its full separation from Flipkart in late 2022, a move orchestrated by parent company Walmart to sharpen its focus on India’s digital payments sector.
“PhonePe’s IPO isn’t just about raising capital—it’s a strategic play to cement its leadership in a market where digital payments are projected to hit $1 trillion by 2026,” said a Mumbai-based fintech analyst, speaking anonymously. “The choice of advisors reflects their ambition to appeal to institutional investors while navigating India’s regulatory nuances.”
Challenges and Opportunities
While PhonePe dominates UPI transactions, its path to profitability remains under scrutiny. The firm has expanded into insurance, wealth management, and e-commerce via its Indus App Store, diversifying revenue streams beyond transaction fees. Its valuation leap—from $12 billion in a 2023 funding round to the proposed $15 billion—will likely hinge on investor confidence in these new verticals and India’s broader digital adoption trends.
However, global market volatility and regulatory shifts, including India’s recent scrutiny of fintech lending practices, could pose hurdles. PhonePe’s ties to Walmart, which acquired it as part of Flipkart in 2018, may bolster investor trust, given the retail giant’s long-term commitment to India’s consumer economy.
Broader Implications
A successful IPO would solidify PhonePe’s position as a standalone entity and inject momentum into India’s tech ecosystem, encouraging other unicorns to pursue public listings. It would also spotlight the explosive growth of India’s digital payments sector, driven by government-backed initiatives like UPI and a surge in smartphone penetration.
As March approaches, all eyes will be on PhonePe’s draft prospectus, expected to disclose financials, fundraising targets, and growth roadmaps. For now, the fintech major’s IPO ambitions underscore a watershed moment for India’s homegrown startups—and the global investors eager to back them.