PhonePe got investment of Rs 5000 crore
America’s well-known private equity firm General Atlantic has made another big investment in India’s leading digital payment company PhonePe. The company has invested $600 million (about ₹5,000 crore) in PhonePe. After this deal, General Atlantic’s stake has increased from 4.4% to 9%. This deal has happened at a time when PhonePe is preparing for its much-awaited IPO.
Why was this investment made?
This investment is mainly a secondary transaction, that is, in this the company did not issue new shares. Instead, this money has been brought for those PhonePe employees who are using their Employee Stock Option Plans (ESOPs).
Actually, when employees use their ESOP, they have to pay tax on it. This investment by General Atlantic will help the employees of PhonePe to meet their tax liability. According to the information, neither any founder nor the existing investors have sold their shares in this deal.
General Atlantic’s confidence in PhonePe
This is not the first time that General Atlantic has invested in PhonePe. From 2023 till now, the company has invested about $ 1.15 billion i.e. more than ₹ 9,500 crore in PhonePe. This shows that the firm has full confidence in the future of PhonePe and its growth. This investment will further strengthen PhonePe’s strong position in the rapidly growing financial services and digital payments sector.
IPO preparations in full swing
This new fund raise of PhonePe has happened at a time when the company is moving rapidly towards listing (IPO) in the stock market. According to an ET report, PhonePe is preparing to file the Draft Red Herring Prospectus (DRHP) by the end of this year. The company aims to launch an IPO of approximately ₹12,000 crore ($1.35 billion), which could be one of the largest IPOs in India’s fintech sector. Through this Offer for Sale (OFS), big investors like Walmart, Tiger Global and Microsoft can sell some of their stake, due to which their total stake can reduce by about 10%.
PhonePe’s performance and future
PhonePe’s business performance before IPO has also been excellent. The company’s revenue increased by 40% to ₹7,115 crore in FY 2025. The company has expanded rapidly not only in payment services but also in financial services like insurance, mutual funds and loans. The biggest thing is that PhonePe has now become a company with positive free cash flow. The company generated cash flow of ₹1,202 crore from its operations in the last financial year.