Walmart-backed Indian fintech company PhonePe has temporarily halted its initial public offering (IPO) plans due to geopolitical tensions and instability in global capital markets, the firm announced earlier this week, on Monday, March 16.
PhonePe, which operates the most widely used digital payments application in India, intends to continue its listing process once market stability is restored, as stated in a release.
The ongoing conflict in the Middle East has unsettled market sentiment around the globe, leaving investors concerned about the possibility of extended conflicts.
This situation has negatively impacted market launches from Hong Kong to London, with Indian assets facing pressure as the rupee reached all-time lows and the benchmark equity index dropped 5.5% since the onset of the war.
In light of PhonePe’s decision to temporarily suspend its public listing, certain segments of the market have tried to link the delay to “valuation mismatches.” However, one section of market experts believes that this choice might be influenced more by the global economic situation than by other factors.
Here’s what experts say
Anuj Gupta, a SEBI-registered market expert, said PhonePe’s IPO delay doesn’t come as a surprise but looks like a calculated move taken by the management, rather than a valuation-related metric.
Gupta added that amid escalating US-Iran war, the global equities are under pressure and launching an IPO in such a volatile market won’t be a wise move. “The market was also expecting a pause or some delay in the launch of the much-awaited public issue. Some other much-awaited IPOs have also done this earlier,” Gupta said, emphasising the tactical nature of the action.
Similarly, Avinash Gorakshakar, a SEBI-registered fundamental equity analyst, said that amid high volatility in the equity market and no signs of de-escalation in the US-Iran war, it would have been a “suicidal step” to come up with an IPO that is eagerly awaited.
“Sometimes, a good quality company’s IPO fails to get a strong response because retail investors remain shy of investing due to market volatility. So, PhonePe hasn’t taken any surprising step to pause its public offer in the current market scenario and to some extent, even the market was estimating about such a move,” added Gorakshakar.
Further, Arun Kejriwal, the founder of Kejriwal Research and Investment Services, mentioned that there are two perspectives to consider. The current market environment is not optimal. Certainly, the market experienced a robust rally over the past three days, and in that time recouped nearly 40% of our losses from earlier in the week.
“Perhaps investors are seeking a more favourable market timing. Additionally, it may also be that, given the current downturn, the valuations that were being offered didn’t align with their expectations. So, it’s not simply one factor or the other; it’s a mix of both reasons,” said Kejriwal.
However, Mohit Gulati, CIO and managing partner of ITI Growth Opportunities Fund, said that PhonePe’s management is playing a valuation maximisation game at precisely the wrong moment. The regulator has been systematically chipping away at their market dominance, the war in Middle East has frozen foreign capital’s appetite for high-beta emerging market bets, and global funds — the very investors needed to justify a premium valuation — are sitting on the sidelines.
“You can wait for the perfect IPO window all you want, but you cannot wait out a structural regulatory headwind. This is less a calculated pause and more a hand forced by circumstances,” said Gulati.
Favourable Tailwinds
PhonePe is confident that after receiving SEBI approval in January 2026, it has an 18-month period to time its IPO, enabling it to wait for better market conditions instead of hurrying in a volatile environment.
On the operational front, PhonePe has achieved free cash flow positivity, producing over ₹1,200 crore in operating cash flow, which reduces any pressure to secure capital for survival.
Although the company continues to face reported losses due to one-time, non-cash ESOP expenses associated with its reverse flip to India, it remains fundamentally profitable, with an adjusted PAT of approximately ₹630 crore, the company said in a press release.
The DRHP filed by PhonePe indicates that the company has significantly reduced its losses over the past three fiscal years. Restated losses declined by more than ₹1,060 crore from FY23 to FY25, reaching ₹1,727.41 crore.
At the same time, revenue from operations increased from ₹2,914.28 crore in FY23 to ₹7,114.85 crore in FY25, reflecting a strong CAGR of 56.25%. The company also turned positive at the adjusted EBITDA level in FY24 and FY25, and reported adjusted EBIT profitability in FY25.
PhonePe derives 42% of its revenue from non-payment sectors such as merchant services, insurance, and lending. The company is also looking at diversifying and monetising its user base of 650 million.
PhonePe IPO details
As per the UDRHP, the public offering will feature an offer for sale of up to 50,660,446 equity shares, led by the major shareholder Walmart, along with other prominent investors such as Tiger Global and Microsoft.
Before PhonePe’s IPO plans were put on hold, the company was eyeing to list at a valuation in the range of $9 billion to $10.5 billion, according to a PTI report.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
