PhonePe IPO: How the company’s large user base supports expansion beyond payments

As PhonePe prepares for its proposed initial public offering (IPO) in April 2026, its Draft Red Herring Prospectus (DRHP) offers a detailed look into how scale is translating into revenue across payments and financial services, even as monetisation in the UPI ecosystem remains structurally low.

According to the company’s DRHP, PhonePe reported operational revenue of ₹3,918 crore in the first half of FY26, up 22% year on year. Payments continued to be the company’s largest revenue contributor, accounting for around 82% of total revenue, while lending and insurance accounted for 11.5% of the top line during the period.

The data shows that rising volumes are driving absolute revenue growth, with the company’s large throughput offsetting lower unit margins compared with niche peers.

Payments drive the bulk of revenue

PhonePe processed nearly 48% of India’s UPI transaction value in H1 FY26, according to company disclosures.

This scale translated into net payment revenue of ₹2,310 crore during the six-month period, underscoring how transaction volumes remain central to the company’s revenue profile despite low per-transaction margins in UPI payments.

Recurring use cases support engagement

Beyond peer-to-peer transfers, PhonePe’s data shows significant usage across recurring payment categories. In H1 FY26, the company held a 57% share in UPI Autopay transactions, facilitated 36% of bill payments through the Bharat Bill Payment System (BBPS), and accounted for 46% of online recharge transaction value.

These categories typically include recurring transactions such as utility payments, subscriptions, and recharges, which drive repeat usage on the platform.

Growth in financial services

PhonePe’s lending and insurance segment more than doubled year-on-year in H1 FY26, though it remains a smaller contributor to overall revenue. The company operates as a Lending Service Provider (LSP) and has partnerships with 56 banks and non-banking financial companies, as per the DRHP.

PhonePe reported a monthly active customer base of 23.7 crore during the period, which it leverages to distribute financial products across its platform.

Profitability and regulatory backdrop

Despite regulatory changes affecting certain revenue streams—such as restrictions on rent payments and real-money gaming in 2025 that ₹1,500 crore-“>resulted in a revenue impact of about ₹1,500 crore- PhonePe reported an adjusted EBITDA of ₹253.9 crore in H1 FY26.

However, the company continued to report losses, with a net loss of ₹1,444 crore during the six-month period. The DRHP notes that the coming quarters will be critical as the company works to narrow losses while expanding new revenue streams.

The company’s listing plans also come amid the National Payments Corporation of India’s proposed 30% cap on UPI market share, which has been deferred to December 2026.

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