Walmart-Backed Fintech PhonePe Becomes 'Public Company' Ahead of IPO

Fintech major PhonePe has transitioned itself from a private firm to a public company ahead of its initial public offer (IPO) scheduled this year, the digital payments player told the Registrar of Companies (RoC). On April 16, the fintech firm decided to change its name from “PhonePe Private Limited” to “PhonePe Limited” in a general meeting.

This is a crucial legal step for companies seeking to list on the Indian stock markets. According to the rules, this change has to be approved by the Central Processing Centre, Ministry of Corporate Affairs. For approval, the ministry approves a fresh certificate of incorporation.

“Upon the approval of the conversion of the Company to a public limited company by the MCA, the name of the Company wherever appearing outside the offices, and in the books and papers, letterheads, business papers, letters, notices, official publications, or communications, website and any other document(s) of the Company be read as ‘PhonePe Limited,” the statement said.

In February, PhonePe announced that it has started preparatory steps for a potential IPO. The Walmart-owned fintech firm has already picked a few advisers, including Kotak Mahindra Capital, JP Morgan, Citi and Morgan Stanley, for the IPO, seeking a valuation of up to $15 billion.

PhonePe's FY24 Results

PhonePe narrowed its FY24 loss to Rs 1,996 crore from Rs 2,795 crore in FY23, even as its share based payment expenses rose during the period. During the same year, the company witnessed around 74% increase in revenue to Rs 5,064 crore, as compared to Rs 2,914 crore in the previous year.

Not counting its employee stock option (ESOP) expenses, the company logged an 'Adjusted profit after tax' of Rs 197 crore for the first time, its annual report showed.

Its ESOP cost has been growing quite fast - Rs 843 crore in FY21, Rs 1186 crore in FY22, Rs 2057 crore in FY23 and Rs 2193 crore in FY24. ESOP cost went up due to a series of one-off factors like the company's redomicile to India and the rise of its valuation from $5.5 billion and to $12 billion in the latest round of funding.

The fintech’s valuation stood at $12 billion till its last fundraising round conducted in 2023. As per reports, PhonePe had around 53 crore registered users and 20 crore monthly active customers as of March 2024. Additionally, PhonePe also reported processing over 770 crore transactions per month with a total value of Rs 10.5 lakh crore.