PhonePe’s IPO filing highlights a major bet on self-owned infrastructure as a competitive moat
Large-scale investment has helped bring down transaction costs through operating leverage
The strategy reflects a broader fintech shift from growth-first models to sustainability-led scale
As PhonePe prepares for its stock market debut after getting regulatory approval, its updated draft prospectus highlights the fintech start-up’s long-term infrastructure strategy. This signals a shift in India’s fintech sector from rapid scaling to building durable competitive moats.
Since 2016, the fintech player has invested ₹33.73 billion in proprietary, on-premises infrastructure, according to the filing. It has developed a four-layer technology stack, which includes more than one million compute cores and nearly 30.95 petabytes of storage capacity.
3 February 2026
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While some market observers have raised concerns that such capital expenditure could weigh on near-term profitability, PhonePe has positioned its infrastructure ownership as a structural advantage rather than a cost burden.
Currently, the company reports a server cost of approximately ₹0.06 per transaction. It suggests that economies of scale are already lowering unit costs as volumes grow.
The company argues that reliance on third-party cloud and infrastructure providers becomes less economical at hyperscale, particularly for businesses with predictable and consistently high transaction loads such as payments.
Even a Redseer report also mentioned that the fintech companies will survice only if they can build and control their compete technology stack.
PhonePe IPO
The fintech major has proposed a 100% book-built offer-for-sale (OFS) of up to 50.66 million (506,604,456) equity shares. Since this is a pure OFS, PhonePe will not receive any proceeds, all sale proceeds will go to the existing shareholders who are selling.
The shares being offered (face value ₹1 each) are being sold by the promoters and select investors and will represent a portion of the company’s post-offer paid-up equity; the exact percentage will be disclosed at pricing.
The UDRHP states that PhonePe has 50.66 million equity shares outstanding before the offer and that it has received in-principle listing approvals from both exchanges.
The filing names the selling shareholders and the book-running lead managers; the final price band, lot size and allotment mix will be announced closer to the bidding period.
In FY25, the company reported revenue from operations of ₹71,148.585 million and total income of ₹76,313.825 million. During the year, adjusted EBITDA stood at ₹14,771.926 million, translating into an adjusted EBITDA margin of about 20.76%. However, on a restated basis, PhonePe continued to report a net loss of ₹17,274.10 million.
It also includes adjusted profit or loss figures and platform-level EBITDA break-ups, which the management uses to demonstrate improving underlying business economics despite continued GAAP losses. At the same time, the UDRHP cautions investors that the six-month financials ended September 30, 2025 should not be treated as indicative of full-year performance.
