PhonePe pre-IPO reset: Rs 3,937 Cr founders’ secondary; Rs 1,500 Cr hit from credit card rent, RMG exits

As PhonePe moves closer to its public listing, its updated draft red herring prospectus (DRHP) highlights how regulatory developments and shareholder liquidity events have reshaped the company’s revenue mix over the past year.

The filing shows that PhonePe has witnessed secondary share transactions worth Rs 5,771 crore since 2023. A significant portion of this came in September 2025, when co-founders Sameer Nigam and Rahul Chari undertook a secondary sale worth Rs 3,937 crore, with shares bought by General Atlantic.

As per the UDRHP, the founders’ secondary sale during the period was linked to meeting tax obligations arising from the exercise of ESOPs. The transaction was part of a structured arrangement under which shares were purchased by an existing shareholder, and the proceeds were used to pay taxes on behalf of the individuals.

Alongside these shareholder exits, PhonePe has also exited certain payment categories following regulatory intervention. According to the DRHP, the company discontinued credit card payment services for rent and related categories in September 2025 after receiving regulatory communication from the Reserve Bank of India (RBI) under the payment aggregator framework.

The impact of this move is visible in the numbers. Revenue from rent and related categories stood at Rs 518 crore in the six months ended September 2025, while the segment contributed Rs 1,262 crore in FY25. During FY25, rent-related payments accounted for 8.92% of PhonePe’s total gross margins.

PhonePe has also exited revenue streams linked to real money gaming (RMG) following legislative changes. As per DRHP, the company ceased generating revenue from advertising and payment gateway services associated with RMG after the enactment of the Promotion and Regulation of Online Gaming Act, 2025 on August 22, 2025. Consequently, PhonePe’s financials from October 2025 onwards exclude any contribution from the segment. RMG revenue stood at Rs 70 crore in H1 FY26, while the segment contributed Rs 245 crore in FY25.

With both rent-related payments and RMG now excluded from its business, PhonePe has effectively shut down revenue streams that together contributed Rs 1,512 crore in FY25. The exit of these categories is expected to have a bearing on the company’s near-term financial performance, even as it sharpens its focus on core UPI payments and financial services in the run-up to its IPO.

Update (5:40 pm, January 22): An earlier version linked the Rs 3,937 crore secondary sale to founder liquidity. A PhonePe spokesperson clarified that the transaction was to meet ESOP-related tax obligations.