Image COurtesy: Mint
As the firm prepares for its initial public offering, Walmart-owned Flipkart and digital payments service PhonePe declared on Friday that they had fully separated their ownership interests (IPO).
Existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, have bought shares in PhonePe India as part of this transaction.
After its separation from Flipkart, PhonePe will have its whole corporate domicile in India, completing a process that began earlier this year. In October, it finished the process of transferring its domicile from Singapore to India.
Walmart will continue to have a majority stake in both company organisations.
The two companies said in a joint release that establishing these businesses as separate organisations will help them to chart their own growth paths as they continue to produce industry-leading services that promote access and inclusion for Indians.
Setting up these firms as distinct entities will also bring value and new options for investors to participate in the Indian tech ecosystem, assisting in unlocking and maximising enterprise value for the two companies’ shareholders, they noted.
PhonePe intends to go public after its primary businesses become profitable, which it wants to do by 2023.
“Flipkart and PhonePe are proud, homegrown Indian brands with a user base upwards of 400 million each. We are looking forward to the next phase of our growth as we invest in new businesses –like insurance, wealth management and lending, while also enabling the next wave of growth for UPI payments in India. This will help propel our vision to provide billions of Indians with financial inclusion,” said Sameer Nigam, founder and chief executive at PhonePe.
PhonePe was founded in 2015 by Nigam, Rahul Chari, and Burzin Engineer, and has since provided various mutual funds and insurance products on the site.
In 2016, the Flipkart Group purchased the company. It claims to have over 400 million registered users and 35 million offline businesses scattered over Tier 2, 3, 4, and beyond, covering 99% of the country’s pin codes.
“We are confident PhonePe will continue to scale and achieve its vision of providing financial inclusion to millions of Indians. Flipkart stays committed to its purpose to empower every Indian’s dream by delivering value through innovation in technology and commerce while helping small businesses connect to pan-India markets,” said Kalyan Krishnamurthy, chief executive of Flipkart Group.
Meanwhile, according to Bloomberg, PhonePe is trying to raise up to $1 billion from General Atlantic and existing investors such as Tiger Global Management, Qatar Investment Authority, and Microsoft Corp. at a valuation of around $13 billion.
During the fiscal year ended 31 March 2022, PhonePe’s consolidated operational revenue more than doubled to Rs.1,646 crore. However, the company’s loss increased to 2014 crore from 1728 crore in the previous fiscal year.
