IPO-bound PhonePe targets growth in payments, merchants, new platforms
In its draft papers, the company said digital payments will remain the core driver of growth, supported by investments to expand its user base, addressable market and platform scale.
Walmart-backed PhonePe, which aims to float its initial public offering (IPO) in April, plans to deepen its presence in India's digital payments market while expanding into financial services and new consumer platforms.
In its draft papers, the company said digital payments will remain the core driver of growth, supported by investments to expand its user base, addressable market and platform scale.
India's total addressable market for digital consumer payments stood at Rs 301 lakh crore in fiscal 2025 and is projected to grow to Rs 602-681 lakh crore by fiscal 2030, the company said, citing industry estimates.
According to sources, PhonePe is aiming to launch its IPO in April.
The proposed offering will be entirely an offer for sale of 5.06 crore shares by Walmart, Microsoft and Tiger Global, with no fresh issue component.
In January, the company received regulatory approval from the Sebi to proceed with its maiden public offering, following its confidential filing in September.
To expand its consumer base, PhonePe plans to deepen penetration across smartphones and feature phones.
India had an estimated 69-70 crore smartphone users in fiscal 2025, which is projected to rise to 96-108 crore by fiscal 2030, while feature phone users are estimated at 20-30 crore, according to the DRHP.
In June 2025, PhonePe acquired conversational engagement platform Gupshup's GSPay technology stack to enable UPI-based payments on feature phones. The company said it is also exploring future consumer use cases, such as credit on UPI, transit payments across transport modes, and payments through smart and connected devices.
"We are also focused on future consumer-facing opportunities, such as enabling all forms of credit on UPI, building transit solutions across all modes of transportation, and expanding consumer touchpoints through smart and connected devices across homes and vehicles," the company said.
As of March 31, 2025, PhonePe had over 29 crore active customers, representing about 41-42 % of India's smartphone user base, indicating significant headroom for growth.
On the merchant side, PhonePe plans to expand adoption of digital payments in a market where penetration remains well below global peers. India's digital merchant payment penetration stood at about 45 % in fiscal 2025, compared to China's 93 %, according to a report by RedSeer.
Merchant digital payment volumes in India reached Rs 112 lakh crore in FY25 and are projected to grow at a compound annual rate of 20-22 % through FY30, supported by government initiatives, such as the Payments Infrastructure Development Fund (PIDF) scheme.
India has an estimated 5.6-5.8 crore small and micro merchants, 30,000-40,000 mid-market businesses and over 20,000 large enterprises.
However, only about 1.11 crore merchants transact on PhonePe on a monthly basis, with around 67.5 lakh engaging daily, highlighting further scope for penetration, the company said.
PhonePe is also scaling its financial services distribution business, including lending and insurance. Beyond its core businesses, the company plans to invest in new platforms to diversify revenue streams, including Share.Market, its digital investing and wealth management platform, and an indigenous mobile app store, Indus Appstore.
The company's financial performance improved in FY25, with revenue rising 40 % year-on-year to Rs 7,115 crore, while adjusted profit after tax more than tripled to Rs 630 crore.