PhonePe's Sameer Nigam Says UPI MDR Move Brings IPO Filing Closer

PhonePe’s plans to go public could move closer to the filing stage following the introduction of a merchant discount rate (MDR) on certain UPI transactions. PhonePe co-founder and CEO Sameer Nigam said the additional revenue opportunity from UPI MDR could help the Bengaluru-based fintech firm revisit its IPO timeline.

PhonePe reported an 11 per cent year-on-year increase in consolidated revenue for FY26, reaching Rs 7,920 crore compared with Rs 7,115 crore in FY25.

“It definitely will push us closer to a filing from a business standpoint. There are a few other variables. We are just looking at some of them. And once MDR settles in, I think we will be back on the drawing board. And hopefully timelines are much sooner,” Nigam said.

His comments came a day after the National Payments Corporation of India (NPCI) announced a 0.4 per cent merchant discount rate on UPI transactions above Rs 2,000. The new MDR is scheduled to come into effect from October 15.

MDR refers to the fee paid by merchants to banks for processing digital transactions. NPCI operates UPI, India's widely used digital payments network.

PhonePe had postponed IPO plans

PhonePe had indefinitely postponed its IPO process earlier this year, citing geopolitical uncertainties and prevailing investor sentiment. The company had received approval from market regulator Securities and Exchange Board of India (SEBI) for its initial public offering on January 20.

According to a previous report, PhonePe was considering raising $1.3 billion through the IPO at a valuation of around $13-15 billion.

“The promise of UPI MDR has been there for the last almost three or four years. And it's a question that a lot of investors ask us. What does this translate into on the consumer side or the merchant side? I think having a positive response to that will be helpful,” Nigam added.

PhonePe currently processes around 11.5 billion transactions every month, with the total transaction value exceeding Rs 14 lakh crore.

How UPI MDR could impact PhonePe

UPI apps are expected to receive 20 per cent of the MDR collections. PhonePe commands more than 45 per cent of the UPI market, suggesting that around 10 per cent of total MDR collections could potentially accrue to the payments platform.

PhonePe also has a significant role in merchant acquisition, with merchant-facing entities expected to receive another 30 per cent of MDR collections.

Brokerages and analysts have estimated total MDR collections in the range of Rs 13,000 crore to Rs 26,000 crore.

Nigam, however, did not provide a firm IPO filing date, saying, “Hopefully in the financial.”

If completed, PhonePe’s public listing could become one of the largest new-economy IPOs after rival Paytm's listing in 2021. Paytm had an IPO valuation of around $20 billion, with an issue size of approximately Rs 18,000 crore.

ABOUT THE AUTHOR

Kahekashan

[email protected]

Kahekashan is a passionate technophile with a keen eye for cutting-edge gadgets, emerging technologies, and everything in the digital realm. Raised in a Defence family with strong values and a background in literature, she has consistently pursued excellence in every endeavour. Her last full-time assignment involved content writing with the Indian School of Business.

Read More