Walmart-owned Flipkart and digital payments platform PhonePe announced the separation of their ownership on Friday, as the company prepares for its initial public offering (IPO). Walmart will retain its majority stake in both business groups.
Existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, have purchased direct shares in PhonePe India as part of this transaction.
PhonePe is now fully independent of Flipkart, completing a process that began earlier this year. In October, it completed the process of relocating its headquarters from Singapore to India.
The two companies said in a joint release that establishing these businesses as separate entities will allow them to chart their own growth paths as they continue to build industry-leading offerings that provide access and inclusion for Indians.
Setting up these businesses as separate entities will also provide value and new opportunities for investors to participate in the Indian tech ecosystem, assisting in unlocking and maximising enterprise value for the two companies’ shareholders, they added.
PhonePe intends to go public once its core businesses become profitable, which it hopes to do by 2023.
PhonePe was founded in 2015 by Nigam, Rahul Chari, and Burzin Engineer, and has since introduced several mutual funds and insurance products on the platform.
In 2016, the Flipkart Group purchased the company. It claims to have over 400 million registered users and 35 million offline merchants spread across Tier 2, 3, 4, and beyond, covering 99 per cent of the country’s pin codes.
Meanwhile, according to Bloomberg, PhonePe is looking 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 March 31, 2022, PhonePe’s consolidated operating revenue more than doubled to Rs 1,646 crore. However, its loss increased from Rs 1728 crore to Rs 2014 crore in the previous fiscal.
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