Flipkart-owned PhonePe receives Rs 698 Cr infusion from parent company

Flipkart-owned digital payments company PhonePe has received a fund infusion of about Rs 698 crore from its parent firm, as per regulatory filings.

"...the consent of the board of directors of the company be and is hereby accorded to allot 2,022,946 equity shares of Rs 10 only each at a securities premium of Rs 3,440 per share aggregating to Rs 6,97,91,63,700 only new equity shares to PhonePe Pvt Ltd, Singapore (formerly Flipkart Payments Pvt Ltd)," a regulatory filing to the Corporate Affairs Ministry showed.

The resolution to allot the said shares to PhonePe Pvt Ltd was passed at a board meeting on July 5.

However, the company did not respond to an email query.

In March this year, PhonePe raised over Rs 700 crore from its Singapore-registered parent entity, which was a part of the $500 million commitment by Flipkart.

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The fund infusion will provide PhonePe more muscle to compete in the burgeoning payments segment in India. It currently competes against the likes of Paytm, Google Pay, Amazon Pay and others in this space.

Interestingly, messaging giant WhatsApp recently stated that it plans to roll out its payments service in India later this year. The Facebook-owned company has been testing its payments service in the country since last year with about a million users, but could not launch full-fledged services as it has been awaiting regulatory approvals.

Digital payments have seen significant growth in India after the government's demonetisation drive in 2016.

There have been reports that Flipkart is looking at hiving off PhonePe into a separate entity, a move that would help the payments company raise $1 billion independently.

Last Month, PhonePe said the platform reached an offline merchant base of over five million.

This is a rapid increase from January 2019, when the total offline merchants on the platform stood at 1 million, which crossed three million in April.

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