PhonePe IPO eyes up to $10.5 bn valuation; check likely issue size, peer comparison & more
IPO-bound PhonePe has recently filed its UDRHP with capital market regulator Sebi and the fintech major eyeing valuation around $9-10.5 billion, suggest some reports.
- Mar 10, 2026,
- Updated Mar 10, 2026 3:33 PM IST
IPO-bound PhonePe has recently filed its update draft red herring prospectus (UDRHP) with capital market regulator the Securities and Exchange Board of India (Sebi). According to a recent report from Reuters, the fintech major is eyeing a valuation of around $9–10.5 billion (Rs 86,500–97,500 crore).
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. The current valuations suggest PhonePe's issue size could be around Rs 8,650–9,750 crore. PhonePe's listing would make it India's second-largest fintech IPO after One 97 Communications (Paytm), which listed in 2021.
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 and analysts flag profitablity as a major concern for the company
PhonePe has a leading position in the Indian UPI industry, accounting for over 48 per cent market share based on transaction value, having handled 9.8 billion transactions in December, according to NPCI data. Its losses widened to Rs 1,444 crore in the six months ended September 30, while revenue rose about 22 per cent to Rs 3,918 crore. Ebitda loss stood at Rs 2,130 crore.
Despite healthy revenue growth, profitability remains a key challenge for PhonePe. Operating losses narrowed in FY25 but are projected to widen again in FY26E before improving in FY27E, reflecting continued investments in technology, customer acquisition, and new platform development, said Khandwala Securities.
The payments business operates with structurally low margins, while adjacent services are yet to generate significant operating leverage. Consequently, Ebitda remains negative and net losses persist through FY27E, with limited near-term visibility on breakeven despite scale advantages, it said. From a valuation standpoint, Khandwala believes PhonePe appears expensive.
PhonePe has pivoted towards merchant-related monetization and loan distribution to accelerate revenue growth. About 18 per cent of its H1FY26 revenue came from real money gaming, rent payments, and PIDF incentives—which will be discontinued and may weigh on revenue growth, said Emkay Global Financial Services in a note dated February 25.
Despite similar reported revenue as Paytm's, PhonePe's profitability is significantly lower due to high ESOP costs as well as depreciation and amortization expenses. "While we see long-term potential in monetizing PhonePe's consumer engagement, we believe that Paytm offers a more favorable risk-reward, given PhonePe's weaker profitability profile and high valuation," it said.
Even Bernstein, in its note on February 23, addressed profitability, stating that Paytm currently operates around breakeven, whereas PhonePe remains loss-making at the profit-before-tax level. The fixed costs for both companies are similar, but PhonePe’s higher ESOP expense—which stands at about 40 per cent of revenue—is a key factor behind its lack of profitability.
The IPO of PhonePe will be entirely an offer-for-sale (OFS) of up to 5,06,60,446 equity shares from existing shareholders, including WM Digital, Microsoft Global Finance, and Tiger Global. The company itself will not receive any proceeds from this mega-IPO. The fintech major is already being compared to its arch peer Paytm.
The pre-IPO market for PhonePe shares remains restricted because only a few secondary transactions occur through private agreements between early investors and employees. The unlisted market pricing has reached a new equilibrium point, which emerged during the past six to twelve months, said Piyush Jhunjhunwala, Founder and CEO of Stockify.
Earlier trades reflected highly optimistic valuations driven by the rapid growth of India’s digital payments ecosystem and PhonePe’s dominant position in the UPI segment. Investors now assess companies through more cautious methods as they expect IPO valuations to reflect actual market conditions rather than pre-IPO speculation, he said.
IPO-bound PhonePe has recently filed its update draft red herring prospectus (UDRHP) with capital market regulator the Securities and Exchange Board of India (Sebi). According to a recent report from Reuters, the fintech major is eyeing a valuation of around $9–10.5 billion (Rs 86,500–97,500 crore).
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. The current valuations suggest PhonePe's issue size could be around Rs 8,650–9,750 crore. PhonePe's listing would make it India's second-largest fintech IPO after One 97 Communications (Paytm), which listed in 2021.
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 and analysts flag profitablity as a major concern for the company
PhonePe has a leading position in the Indian UPI industry, accounting for over 48 per cent market share based on transaction value, having handled 9.8 billion transactions in December, according to NPCI data. Its losses widened to Rs 1,444 crore in the six months ended September 30, while revenue rose about 22 per cent to Rs 3,918 crore. Ebitda loss stood at Rs 2,130 crore.
Despite healthy revenue growth, profitability remains a key challenge for PhonePe. Operating losses narrowed in FY25 but are projected to widen again in FY26E before improving in FY27E, reflecting continued investments in technology, customer acquisition, and new platform development, said Khandwala Securities.
The payments business operates with structurally low margins, while adjacent services are yet to generate significant operating leverage. Consequently, Ebitda remains negative and net losses persist through FY27E, with limited near-term visibility on breakeven despite scale advantages, it said. From a valuation standpoint, Khandwala believes PhonePe appears expensive.
PhonePe has pivoted towards merchant-related monetization and loan distribution to accelerate revenue growth. About 18 per cent of its H1FY26 revenue came from real money gaming, rent payments, and PIDF incentives—which will be discontinued and may weigh on revenue growth, said Emkay Global Financial Services in a note dated February 25.
Despite similar reported revenue as Paytm's, PhonePe's profitability is significantly lower due to high ESOP costs as well as depreciation and amortization expenses. "While we see long-term potential in monetizing PhonePe's consumer engagement, we believe that Paytm offers a more favorable risk-reward, given PhonePe's weaker profitability profile and high valuation," it said.
Even Bernstein, in its note on February 23, addressed profitability, stating that Paytm currently operates around breakeven, whereas PhonePe remains loss-making at the profit-before-tax level. The fixed costs for both companies are similar, but PhonePe’s higher ESOP expense—which stands at about 40 per cent of revenue—is a key factor behind its lack of profitability.
The IPO of PhonePe will be entirely an offer-for-sale (OFS) of up to 5,06,60,446 equity shares from existing shareholders, including WM Digital, Microsoft Global Finance, and Tiger Global. The company itself will not receive any proceeds from this mega-IPO. The fintech major is already being compared to its arch peer Paytm.
The pre-IPO market for PhonePe shares remains restricted because only a few secondary transactions occur through private agreements between early investors and employees. The unlisted market pricing has reached a new equilibrium point, which emerged during the past six to twelve months, said Piyush Jhunjhunwala, Founder and CEO of Stockify.
Earlier trades reflected highly optimistic valuations driven by the rapid growth of India’s digital payments ecosystem and PhonePe’s dominant position in the UPI segment. Investors now assess companies through more cautious methods as they expect IPO valuations to reflect actual market conditions rather than pre-IPO speculation, he said.