According to Mint, PhonePe Ltd is evaluating options to restart its initial public offering (IPO) process after the National Payments Corporation of India (NPCI) introduced a 0.4% merchant discount rate (MDR) on large UPI transactions effective 15 October. While a share sale is not likely anytime soon, the notification on transaction fee parameters provides structural clarity that facilitates a path to public equity markets. The company plans to submit updated financial metrics with the Securities and Exchange Board of India (Sebi) before moving forward with a listing. This development comes after PhonePe paused its IPO plans on 16 March due to global capital market volatility and geopolitical tensions. The company's latest IPO documents filed on 21 January showed a pure offer for sale of up to 50.66 million shares, led by major shareholder Walmart Inc, along with other prominent investors such as Tiger Global and Microsoft Corp. Before putting its IPO plans on hold, the company was looking to list at a valuation of $9 billion to $10.5 billion.
According to CNBC TV18, PhonePe employees are already seeing IPO benefits with 47.09 lakh vested stock options exercised ahead of a proposed listing. The company had 12,338 employees as of September 2025, and its employee stock-option programme provides opportunities for broader participation in value creation. Walmart's ownership in PhonePe fell from approximately 84% as of January 31, 2025, to about 73% as of January 31, 2026, following the vesting and exercise of certain employee-held options. As reported by CNBC TV18, Walmart recorded a $0.7 billion non-cash charge related to the modification of share-based payment arrangements in anticipation of a potential IPO. The company's broader share-based compensation expense stood at $3.6 billion in fiscal 2026, up 30.1% from $2.8 billion in fiscal 2025 and compared with $2.1 billion in fiscal 2024. CEO Sameer Nigam declined to comment on IPO timing, stating that while MDR certainly makes for better economics, he won't commit on whether the IPO will happen in FY27.
According to Business Standard, Rahul Chari, cofounder and chief technology officer of PhonePe, outlined the company's growth strategy as it completes a decade of operations. The Walmart-backed firm has 700 million registered users and collectively, UPI has about half a billion active users. Chari emphasized that growth will come from taking consumers from sending money to spending money, savings and investments, with sachet-sized products for building financial habits. The company launched UPI for feature phones on SMS protocol, expanding beyond money transfers to include bill payments and scan-and-pay functionality. As reported by People, there is still depth to be created in the existing set of users, with over 100 use cases inside PhonePe app, but a strong pareto towards the top 10 use cases. The company is exploring agentic commerce within the app, including conversational discovery and form-filling procedures for Know Your Customer (KYC) and purchases.
As reported by Business Standard, Chari addressed concerns about market concentration risk, stating that systemic risk is a solved engineering problem. The company operates with three data centres spread across the country and maintains multiple payment service provider partners including Yes Bank, Axis Bank, and ICICI Bank. Consumers have multiple PSP handles they can create, allowing de-risking through failover capabilities. Chari emphasized that UPI itself is fully interoperable and apps are completely substitutable, with consumers having choice and never being held hostage to a platform. As reported by People, the company believes there's no concentration risk, with systemic risk being very important and needing to be taken care of through multiple data centres and failover capabilities.
According to Business Standard, the company operates through three broad lenses: payments, distribution on top of payments, and distribution-based lending. Chari indicated that payments and distribution will continue as a very large part of overall revenue, while lending has been growing well over the past three years. The company views itself as a loan service provider (LSP) supporting lenders by helping them underwrite using transaction risk and behaviour scores. Chari noted that unless the company reaches a point where their scores are good enough to underwrite but there isn't enough risk appetite to enter new-to-credit markets, the need for an NBFC licence becomes less important. As reported by People, the opportunity to be a loan service provider (LSP) or a distributor supporting lenders is a huge opportunity right now, with financial services, lending in particular, becoming a healthy chunk of revenue.
