PhonePe weighs IPO restart as new UPI MDR rules improve revenue visibility

PhonePe is evaluating a return to its IPO process after NPCI set a 0.4% MDR on merchant UPI payments above ₹2,000, capped at ₹300. The company is expected to update SEBI financial metrics, though no near-term share sale is anticipated.

— Source publishedWed, 16 Sept, 2026, 06:45 IST·First seen Wed, 16 Sept, 2026, 06:50 IST·Source Mint · Companies

What happened

PhonePe is evaluating a restart of its IPO process after NPCI introduced a 0.4% MDR for large UPI merchant payments. The framework improves revenue-model

Key facts

  • 0.4% MDR on P2M UPI transactions above ₹2,000
  • ₹300 MDR cap per transaction
  • 95% of transactions remain free
  • IPO offer for sale of up to 50.66 million shares
  • Target valuation: $9 billion-$10.5 billion
  • FY25 restated loss: ₹1,727 crore
  • Loss reduction from FY23 to FY25: over ₹1,060 crore
  • Revenue from operations: ₹2,914 crore in FY23 to ₹7,115 crore in FY25
  • FY23-FY25 revenue CAGR: 56.25%
  • 42% of revenue from non-payment segments
  • Budget 2026 UPI subsidy estimate: ₹2,000 crore for 2026-27

Why this matters

Payments platforms, banks and merchant acquirers should evaluate partnership and competitive implications as monetised UPI transactions could reshape economics in the enterprise payments market.

What to watch

  • NPCI implementation details, effective date, merchant-category coverage and any exemptions or reversals for the new MDR framework.
  • PhonePe disclosures on UPI payment volume above ₹2,000, merchant count, take rate and contribution margin.
  • Merchant adoption or pushback from large retail chains, e-commerce platforms and payment aggregators.
  • Competitive MDR pricing, cashback activity and merchant incentives from Google Pay, Paytm, banks and payment gateways.
  • SEBI filing updates, appointment of IPO advisers, governance changes and refreshed audited financials.
  • Growth in adjacent PhonePe revenues from lending, insurance, wealth, advertising and merchant services.
  • Update IPO financial metrics and investor materials to separate MDR-linked revenue, merchant acquisition costs and contribution margins.
  • Prioritise onboarding and retention of merchants with average transaction values above ₹2,000, especially organised retail, travel, healthcare, education and marketplaces.
  • Bundle UPI acceptance with payment gateways, device solutions, lending, insurance distribution and advertising to increase merchant lifetime value.
  • Monitor competitor merchant pricing and incentives before passing through MDR-related economics aggressively.
  • Build evidence of sustained transaction-volume growth and regulatory compliance before formally re-engaging IPO bankers and anchor investors.

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