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India's IPO landscape is witnessing significant developments, with fintech major PhonePe making moves in preparation for its public listing. Concurrently, the Securities and Exchange Board of India (SEBI) is implementing regulatory reforms to enhance transparency and investor protection, particularly concerning SME IPOs and insider trading norms.
PhonePe has added Zarin Daruwala, former head of Standard Chartered Bank’s India and South Asia operations, as an independent director on its board. She has more than 30 years experience in the banking industry, including key roles at ICICI Bank and board-level experience with firms like ICICI Lombard, ICICI Securities, and JSW Steel.
In FY24, PhonePe reported a 73% year-on-year increase in revenue, reaching ₹5,064 Crores. The company narrowed its net loss to ₹1,996 Crores, a 28% improvement from the previous year. Adjusted profit after tax, excluding ESOP costs, stood at ₹197 Crores. PhonePe's revenue remains heavily reliant on its payments business, which accounts for approximately 95% of total revenue. The company is actively working to diversify its income streams through ventures in insurance, wealth management, and digital lending.
SEBI has introduced several measures to strengthen the regulatory framework for IPOs and insider trading:
SME IPO Regulations: Companies aiming to launch SME IPOs are now required to show a minimum operating profit of ₹1 Crore in at least two of the past three financial years. Additionally, the Offer for Sale (OFS) component cannot exceed 20% of the overall issue size. IPO funds can no longer be used to repay loans taken from promoters or related entities, as per the revised guidelines.
This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.
Sources
Storyboard18 — PhonePe appoints former Standard Chartered Bank CEO Zarin Daruwala to the board, https://www.storyboard18.com/brand-makers/phonepe-appoints-former-standard-chartered-bank-ceo-zarin-daruwala-to-the-board-69182.htm
Moneycontrol — PhonePe appoints former Standard Chartered CEO Zarin Daruwala to the board ahead of IPO, https://www.moneycontrol.com/technology/phonepe-appoints-former-standard-chartered-ceo-zarin-daruwala-to-the-board-ahead-of-ipo-article-13099945.html
Economic Times — PhonePe's 5% dilemma: Payments still dominate revenue as it gets IPO-ready, https://economictimes.indiatimes.com/tech/startups/ipo-bound-phonepe-still-tethered-to-epay-despite-all-out-push/articleshow/121252155.cms
Investing.com — SEBI Tightens SME IPO Rules: Profitability Criteria, OFS Cap Introduced, https://in.investing.com/news/sebi-tightens-sme-ipo-rules-profitability-criteria-ofs-cap-introduced-4713829
LinkedIn — SEBI's Rewriting of Insider Trading Rules for Listed Entities, https://www.linkedin.com/pulse/from-grey-areas-clear-lines-sebis-rewriting-insider-3ha3f
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Posted on 05 Jun
Geetanjali Lachke
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