Walmart-backed PhonePe is making significant strides toward its initial public offering (IPO) on Indian stock exchanges. On Thursday, the fintech leader announced its preparations for this crucial step, signaling a new chapter in its growth journey. With an impressive trajectory in both revenue and profitability, PhonePe feels that now is the perfect moment to explore public listing opportunities.
Strong Financial Performance Fuels IPO Aspirations
PhonePe’s robust financial results, as highlighted in its FY23-24 annual report, underscore the company’s readiness for an IPO. The company stated, “The substantial growth in both top-line and bottom-line across our diverse business offerings makes this an opportune time for a public listing.” This affirmation reflects the confidence the company has in its financial health and market position.
Strategic Shift to India
In a strategic move last December, PhonePe shifted its headquarters from Singapore back to India, solidifying its commitment to the local market. This relocation aligns with their goal of listing on Indian exchanges. Following this transition, CEO Sameer Nigam and his team restructured the company’s corporate framework, transforming various non-payment segments into fully owned subsidiaries—a critical step in their IPO strategy.
Exit from the Account Aggregator Business
Earlier this month, PhonePe made headlines by exiting the account aggregator (AA) business. Instead of maintaining a direct presence, the fintech opted for a partnership model with existing account aggregators. This decision came shortly after the company voluntarily surrendered its non-banking financial company AA (NBFC-AA) license to the Reserve Bank of India, just two years after acquiring it.
Impressive Revenue Growth and Profitability
The company’s financial turnaround is noteworthy. In August 2024, PhonePe recorded an adjusted profit after tax (PAT) of Rs 197 crore for FY23-24, excluding ESOP-related expenses. This was a remarkable recovery from a loss of Rs 738 crore in the previous fiscal year (FY22-23). Furthermore, the digital payments giant experienced a staggering 74% year-on-year revenue increase, climbing from Rs 2,914 crore to Rs 5,064 crore.
As PhonePe gears up for its IPO, investors and market watchers alike are keenly observing its next moves. With a strong foundation and ambitious plans, PhonePe is poised to make a significant impact on the Indian stock market landscape.
