PhonePe Files UDRHP, Cites Payment Processing Charge As Risk

PhonePe Limited has filed its updated Draft Red Herring Prospectus (DRHP-I) with the Securities and Exchange Board of India (SEBI) for a proposed initial public offering (IPO) that will be conducted entirely through an offer for sale (OFS), with no fresh issue of shares. As a result, the company will not receive any proceeds from the IPO. Instead, up to 50.66 million equity shares will be sold by existing shareholders, making the listing a pure secondary sale, and a partial exit for current investors. 

According to the updated DRHP, the selling shareholders include Walmart’s WM Digital Commerce Holdings Pte. Ltd., which will offer up to 45.94 million shares. In addition, Microsoft Global Finance Unlimited Company and Tiger Global PIP 9-1 Ltd. will sell up to 3.67 million shares and 1.04 million shares, respectively. 

Consequently, the entire offer will comprise shares being offloaded by the promoter and investor groups. Furthermore, the company is reportedly looking to raise around $1.3 billion and is targeting a listing valuation of $15 billion.

PhonePe is an Indian financial technology company headquartered in Bengaluru that operates a digital payments platform and related services. Its core products include digital payments via the PhonePe app and a range of financial and consumer-tech businesses such as Share.Market (a wealth and investment platform), and Indus Appstore (a localised mobile app marketplace).

Cap Table

A Look At The Numbers

For the six months ended September 30, 2025, PhonePe reported revenue from operations of Rs 3,918.46 crore, compared with Rs 3,207.51 crore in the same period last year. Meanwhile, the company posted a net loss of Rs 1,444.42 crore between April and September 2025, widening from a net loss of Rs 1,203.20 crore in the corresponding period in 2024.

In addition, for the six months ended September 30, 2025, PhonePe’s net worth stood at Rs 9,539 crore, up from Rs 9,054.63 crore from the corresponding period from last year. However, the company’s return on net worth stood at -15.14%, widening from -13.29% a year earlier.

Operationally, PhonePe processed 9.15 billion Unified Payments Interface (UPI) transactions in August 2025 with a transaction value of nearly Rs 12 lakh crore. The platform held an estimated 46% share of UPI transaction volume during the month.

Risk Factors

Exposure to increases in payment processing charges

The company says its margins depend on payment processing charges payable to banks and financial institutions. If these charges rise materially and PhonePe is unable to pass them on to merchants or consumers, profitability could…