Ahead of IPO PhonePe’s Net Loss Rises 20% YoY in H1 FY26

IPO-bound PhonePe has reported higher losses for the first half of FY26, alongside strong revenue growth, as the company continues to scale its payments and financial services businesses ahead of its proposed stock market listing, as per news reports. 

Financial Performance and Cost Trends 

For the six months ended September 2025, PhonePe reported a net loss of ₹1,444 crore, compared with ₹1,203 crore in the year-ago period, reflecting a 20% year-on-year increase. Revenue rose 22% YoY to ₹3,918 crore during the period.  

The widening loss was driven by higher expenditure, with total expenses increasing to ₹6,069.2 crore from ₹4,680 crore a year earlier. Employee benefit expenses rose 33% to ₹2,869.1 crore, while overall employee attrition increased to 22.1% for the period. 

Revenue Mix and Business Expansion 

Revenue from the payments business, including consumer and merchant payments, grew 15% to ₹3,405 crore from ₹2,961 crore in the corresponding period last year. However, the contribution of payments to operating revenue declined to 86.92% from 92.32%, as other verticals expanded.  

Lending and insurance distribution revenue more than doubled to ₹452 crore, increasing its share of operating revenue to 11.55% from 6.76% a year earlier. While the company has diversified into credit, insurance and stockbroking over the past three years, UPI payments remain its core business. 

IPO Structure, Market Position and Advisers 

PhonePe has filed an updated draft red herring prospectus through the confidential route and is targeting a market debut in April, according to sources.  

The IPO will be entirely an offer for sale by existing shareholders, leading to partial exits by its largest backer Walmart and full exits by early investors Microsoft and Tiger Global.  

Walmart, through WM Digital Commerce Holdings, plans to sell up to 4.59 crore shares, while Microsoft and Tiger Global are offering up to 36.8 lakh shares and 10.39 lakh shares, respectively. The IPO is expected to value PhonePe at around $15 billion, compared with its last private valuation of $12 billion in 2023.  

Market Context 

PhonePe remains the market leader among UPI apps, processing 9.8 billion transactions worth ₹13.6 lakh crore in December 2025, translating into about 48% market share by volume among the top 10 UPI apps, according to data from the National Payments Corporation of India.  

The company has appointed Kotak Mahindra Capital, JPMorgan India, Citigroup and Morgan Stanley as book-running lead managers for the issue. 

Read More: PhonePe Pre-IPO Move: Founders Offload ₹3,937 Crore; New Regulations Lead to ₹1,500 Crore Hit! 

Conclusion 

As PhonePe prepares for its IPO, rising losses alongside expanding revenues highlight the cost of scaling its platform while maintaining leadership in India’s UPI ecosystem. 

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