Walmart might prioritise an IPO for PhonePe ahead of Flipkart, despite Flipkart being the more mature business
There's a lot of processes that have to be put in place before we go public: Walmart Exec
The choice between listing on the Indian exchange versus others is "under consideration" for the future IPO
The initial public offerings (IPOs) of the Flipkart marketplace and PhonePe digital payments platform could take a couple of years, a Walmart executive said.
Speaking on the sidelines of Walmart’s shareholder meeting near its Bentonville, Arkansas, headquarters late Thursday, executive vice president for corporate affairs, Dan Bartlett said, “This is something we’re looking at over the next couple of years.”
Walmart might prioritise an IPO for PhonePe ahead of Flipkart, despite Flipkart being the more mature business, he said, as reported by news agency Reuters.
PhonePe is “one of the largest payment platforms” in India, Bartlett noted. He highlighted PhonePe’s integration with the country’s Unified Payments Interface (UPI), which enables users to transfer money across multiple banks without disclosing account details.
“There’s a lot of processes that have to be put in place before we go public,” Bartlett said, referring to PhonePe. He added that the choice between listing on the Indian exchange versus others is “under consideration” for the future IPO.
In May, the Unified Payments Interface (UPI) ecosystem continued to be dominated by PhonePe and Google Pay, with the two apps collectively commanding over 85% of total transactions.
According to data from the National Payments Corporation of India (NPCI), PhonePe accounted for 48.6% of the total UPI transactions, with 683.19 Cr transactions valued at INR 10.33 Lakh Cr.
Earlier it was reported that, Flipkart initiated talks to redomicile its parent entity to India from Singapore, while Walmart-owned PhonePe already moved its HQ back to India.
In PhonePe’s case, the company was valued at close to $10 Bn in 2022 when it redomiciled to India and is said to have shelled out close to $900 Mn+ to register its parent entity in India. The reverse flipping tax in Flipkart’s case is also likely to be significant.
Meanwhile, PhonePe’s net loss crossed the INR 2,500 Cr mark in the financial year ended March 31, 2023. The Bengaluru-based decacorn’s consolidated net loss rose 39% to INR 2,795.3 Cr in the financial year 2022-23 (FY23) from INR 2,013.7 Cr in the previous fiscal year due to a sharp increase in its ESOP expenses.
PhonePe’s operating revenue surged an impressive 77% to INR 2,913.7 Cr during the year under review from INR 1,646.2 Cr in FY22.
On the other hand, Flipkart Internet Private Limited, the B2C arm of Walmart-owned Flipkart, saw its operating revenue near the INR 15,000 Cr mark in the year ended March 31, 2023. The marketplace arm’s operating revenue zoomed 42% to INR 14,845.8 Cr in the financial year 2022-23 (FY23) from INR 10,477.4 Cr in FY22.
The company also managed to reduce its cash burn, which helped it reduce its net loss by 9% to INR 4,026.5 Cr during the year under review from INR 4,419.5 Cr in FY22.
