PhonePe’s IPO can overtake Paytm!
PhonePe is soon launching its IPO, which is being valued at $1315 billion. According to global brokerage Macquarie Equity Research, this will prove to be a big event in India’s fintech sector and its impact can be especially on Paytm. Let us tell you about it in detail.
PhonePe’s market share
PhonePe currently accounts for more than 45% of UPI transactions as a third-party app. It has more than 657 million registered users and 47 million merchants. Its share in UPI volume is 4951% which is ahead of Google Pay and Paytm.
Revenue and Profit
PhonePe’s revenue in the first half of FY26 was ₹3,918 crore, which is close to Paytm’s ₹3,981 crore. But there is a difference in terms of profit. Paytm’s EBITDA stood at ₹216 crore, while PhonePe’s EBITDA showed a loss of ₹1,559 crore. The main reason behind this is the Employee Stock Option (ESOP) expense, which is ₹1,813 crore (46% of revenue) in PhonePe and only 2% in Paytm.
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According to Macquarie
With PhonePe’s latest funding and IPO, its estimated value can reach $1315 billion. According to Macquarie, PhonePe’s IPO could trade at 3743 times revenue, while Paytm’s at around 19 times. Even on the basis of FY25, the revenue multiple of PhonePe is 16.619.1 times and that of Paytm is 10.5 times. Due to this, there is a possibility of adjustment in the price of Paytm in the coming time.
competition
PhonePe has increased its financial services (loans, mutual funds, insurance) share from 4% in FY24 to 13% in H1FY26. Paytm’s core earnings are still 33%. This has increased competition and put pressure on margins. About 20% of PhonePe’s revenue comes from limited categories (credit card rent, real-money gaming, PIDF incentives). The 30% UPI market share limit by NPCI (by December 2026) may impact PhonePe’s 46% share. Monitoring digital gold sales can also impact profits.
Macquarie’s opinion
Macquarie has a neutral approach on Paytm. The 12-month target price has been kept at ₹1,265. Increase in loan distribution may be beneficial, but competition and asset quality risks also remain in the fintech sector.
