Walmart-owned fintech giant PhonePe has obtained final authorisation from the Reserve Bank of India (RBI) to operate as an online payment aggregator (PA). This development, coming more than two years after its in-principle approval in August 2023, positions PhonePe to deepen its reach among online merchants—with a major focus on small and medium businesses (SMEs)—and to launch new payment solutions at national scale.
Under a PA licence, PhonePe can now directly onboard merchants, deploy digital payment capabilities, and manage payment settlements—removing friction for India’s vast SME segment, which has often struggled with legacy integration barriers. The move strengthens PhonePe’s leadership, which already spans 650 million users and a commanding 46.5% UPI market share (915 crore transactions worth nearly ₹12 lakh crore in August 2025 alone).
IPO Momentum: Funding, Timeline, and Approvals
PhonePe is now poised for its long-awaited IPO, with confidential filing of the draft red herring prospectus (DRHP) with SEBI expected by September-end 2025. The public issue—slated for early 2026—aims to raise $1.2–$1.5 billion (₹10,000–13,000 crore) at a targeted near-term valuation of $7–8 billion, with aspirations for as high as $10–12 billion depending on market demand. The IPO will feature both fresh shares and an offer-for-sale from investors like Tiger Global and General Atlantic, while majority owner Walmart is expected to retain most of its stake.
Read this:PhonePe to file for IPO via confidential route by September-end
PhonePe’s financial improvement has played a key role in unlocking regulatory and market confidence. The company grew revenue 74% YoY to ₹5,064 crore in FY24, moving from a loss of ₹738 crore in FY23 to an adjusted profit of ₹197 crore in FY24 (excluding ESOP costs). The payments business generated ₹710 crore in standalone adjusted profit for the year, driven by diversification into lending, insurance, wealthtech, and super-app offerings like Pincode and Indus AppStore.
Read this : Safest UPI App on the Way? BSNL to Launch UPI-Based ‘BSNL Pay’ This Diwali
Regulatory and Strategic Approvals Along the Way
- PhonePe completed its corporate migration to India and received key regulatory clearances from RBI to offer prepaid instruments, operate as a UPI participant, and provide insurance and wealth management services.
- In August, PhonePe voluntarily surrendered its NBFC license after a strategic exit from lending, bringing tighter regulatory focus on its payment, merchant, and investment operations ahead of its IPO.
With RBI’s payment aggregator nod and a blockbuster IPO on the horizon, PhonePe is set to expand its digital financial offerings to every corner of India while delivering liquidity for its longstanding global investors—poised to further cement its lead in the hyper-competitive Indian fintech landscape
