- SEBI approval clears the last major regulatory hurdle for PhonePe’s anticipated $1.5 bn IPO.
- A $14.5 bn valuation places PhonePe among the elite Indian fintechs, with a clear path toward profitability.
- Dominant UPI footprint (45% BBPS share) and 43.5 crore users create a moat against rivals like Paytm and Google Pay.
- Operating loss narrowed 13% YoY while revenue surged 40%, signaling improving operating leverage.
- Bull case hinges on monetising a growing financial‑services marketplace; bear case watches competitive pressure and macro volatility.
You’ve been missing the biggest fintech IPO in India—until now.
Why PhonePe’s SEBI Green Light Is a Game‑Changer for Investors
The Securities and Exchange Board of India’s (SEBI) nod removes the final regulatory barrier, allowing the company to launch a full‑scale Offer for Sale (OFS). In practice, an OFS lets existing shareholders—Tiger Global, Microsoft and Walmart—sell a portion of their holdings directly to the public, creating immediate liquidity without diluting existing equity. This structure often leads to a tighter price discovery process, which can benefit both sellers and new investors.
PhonePe’s Market Position: Numbers That Speak Louder Than Valuations
Since its 2015 launch, PhonePe has amassed over 43.5 crore registered users, roughly one in four Indians. On the merchant side, it has onboarded close to 3.5 crore offline merchants across Tier‑2, Tier‑3, and smaller towns, covering 99% of India’s pin codes. Its dominance extends to the Bharat Bill Payment System (BBPS), where it processes more than 45% of all BBPS transactions. In December 2025 alone, the platform handled 9.8 billion transactions, underscoring its role as a critical payments infrastructure.
Revenue Growth vs. Loss Narrowing: The Operating Leverage Story
PhonePe reported FY 2024‑25 operating revenue of Rs 7,115 crore, a 40% jump from Rs 5,064 crore the year before. At the same time, the net loss fell 13.4% to Rs 1,727 crore. This dual trend illustrates operating leverage—the ability of a business to increase profit margins as revenue scales while fixed costs remain relatively steady. For investors, improving leverage suggests that each incremental rupee of revenue contributes more to the bottom line, a key metric for assessing long‑term sustainability.
Competitive Landscape: How Paytm, Google Pay, and New Entrants React
Paytm, the erstwhile market leader, has been grappling with a higher cost base and a recent slowdown in user growth. Google Pay leverages its search and Android ecosystem but still trails PhonePe in merchant onboarding depth. Both rivals are accelerating their own financial‑services bundles—mutual funds, insurance, and credit—to match PhonePe’s marketplace model. However, PhonePe’s early focus on UPI integration and its partnership network give it a first‑mover advantage that is difficult to replicate overnight.
Historical IPO Comparisons: Lessons From Paytm’s 2022 Listing and Global Fintech Debuts
Paytm’s 2022 IPO was a cautionary tale: a sky‑high valuation, followed by a sharp post‑listing correction as investors reassessed unit economics. Internationally, Square’s 2015 debut highlighted the upside of strong cash‑flow generation paired with a clear expansion roadmap. PhonePe’s current trajectory—revenue growth, loss narrowing, and a diversified services suite—aligns more closely with the latter, suggesting a potentially smoother market reception if pricing is disciplined.
Technical Outlook: Valuation Multiples, Price‑to‑Sales, and Potential IPO Pricing Range
Analysts are modelling PhonePe’s price‑to‑sales (P/S) multiple between 12× and 18×, given the Rs 7,115 crore revenue base. A 15× multiple would imply an enterprise value of roughly $10.7 bn, translating to a per‑share price that positions the IPO in the upper‑mid tier of Indian fintech offerings. For context, a P/S multiple above 20× historically signals a premium that may be hard to sustain without a clear profitability pathway.
Investor Playbook: Bull and Bear Scenarios
Bull Case:
- Continued expansion of PhonePe’s financial‑services marketplace accelerates fee income.
- Operating leverage improves further, potentially turning the net loss into profitability within 12‑18 months.
- Macro‑friendly policy environment for digital payments fuels transaction volume growth.
- Strategic investors (Walmart, Microsoft) provide cross‑selling opportunities and operational synergies.
Bear Case:
- Intensifying competition erodes margins, especially if rivals launch aggressive discounting campaigns.
- Regulatory tweaks to UPI or BBPS could increase compliance costs.
- Macro volatility in secondary markets may depress IPO pricing, leading to a lower valuation.
- Loss narrowing stalls, and revenue growth slows amid saturation in Tier‑1 cities.
In sum, PhonePe’s IPO is not just another listing—it is a litmus test for India’s burgeoning fintech ecosystem. Whether you decide to allocate capital now or wait for post‑listing price action, understanding the underlying dynamics will be critical to capturing upside while managing downside risk.