PhonePe IPO

It sits in a strong spot in India’s digital payments world, staying number one in UPI (Unified Payments Interface) transactions for 58 straight months as of September 2025. You can also see that leadership in the numbers: it holds a 49.15% market share in total payment value for customer-initiated UPI transactions.

The platform operates at a population scale, meaning it gives service to a user base big enough to look like a whole country. As of September 2025, it had 65.76 crore registered users (roughly 45% of India’s total population of 145.5 crore) and 4.72 crore registered merchants. Its reach spreads across 98.61% of India’s postal codes, and over 65% of its consumers come from Tier-2 and smaller cities, so it’s not just a metro story.

Users genuinely stick with the app: as of September 2025, it had a 99.23% 30-day retention rate (people coming back to transact within a month), which lowers the need to spend heavily on marketing. By March 2025, 41.43% of monthly active customers were “habitual users” (30+ transactions a month), up from 28.41% in March 2023. Even usage depth is rising, with average transactions per customer increasing from 25.50 in FY23 to 38.29 in H1 FY26.

The company has been growing its revenue steadily. Revenue from operations rose 40.50% to ₹7,114.86 crore in FY25 from ₹5,064.13 crore the year before. Over FY23 to FY25, revenue grew at a CAGR of 56.25%.

It is a loss-making company, but the trend is clearly improving. In FY25, it reported positive Adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation of ₹1,477.19 crore, versus a loss in FY23. Its adjusted profit margin also turned positive at 8.26% in FY25, which hints that the business is moving toward healthier, more sustainable profits.

It’s also not trying to survive on payments alone anymore; it’s pushing into financial services too. Revenue from lending and insurance distribution jumped 207.99% to ₹557.65 crore in FY25. Plus, merchant payments made up 30.78% of revenue in the six months ended September 2025, which helps reduce dependence on just consumer payment activity.

Even though the day-to-day business performance has improved, it has still posted net losses every year since it started. That includes a restated loss of ₹1,727.41 crore in FY25 and ₹1,444.42 crore for the six months ended September 2025. If these losses continue, it may become harder to fund future operations and expansion without raising money from outside (like investors or lenders).

A big chunk of its revenue still comes from consumer payments, which made up 56.14% of revenue from operations in the six months ended September 2025. The risk is that payments are closely tied to rules and policy changes, like how rent payment services were stopped in September 2025 due to RBI guidelines. Changes like that can hit revenue directly and slow down growth.

NPCI (National Payments Corporation of India - the body that runs UPI) has proposed a 30% cap, meaning no single third-party app should handle more than 30% of total UPI transaction volume. The deadline has been pushed to December 2026, but the point is: the rule is still on the table. Since it currently sits above that cap, strict enforcement could force it to slow user onboarding (adding new users) or limit transaction volumes, which could seriously dent growth.

It depends fully on three sponsor banks, Yes Bank, Axis Bank, and ICICI Bank, to connect to the UPI system. So if one of these partners has a technical breakdown, changes its pricing or terms, or ends the relationship, transaction processing could get disrupted immediately, and at this scale, even a short outage can be painful.

To keep good talent and support growth, it spends heavily on employees. For the six months ended September 2025, employee costs were ₹2,869.11 crore, which is 47.27% of total expenses. A large part of this is share-based payments (employee compensation in the form of company shares/stock options), which can drag down reported profits and add to losses on paper.

Since it runs a digital platform that handles sensitive money and personal data, it’s naturally a big target for cyberattacks, hacking, and data theft. Any serious breach could hurt its reputation, shake user trust, and even create legal trouble, especially because parts of its setup rely on third-party data centres and cloud services (rented computing infrastructure).