New Delhi, March 6: PhonePe Limited is gearing up for its initial public offering (IPO), as detailed in its updated Draft Red Herring Prospectus (DRHP). The document highlights the vast scale of its merchant ecosystem and monetization strategies.
PhonePe is not a “free” service; rather, its merchant infrastructure has evolved into a revenue engine worth billions, powered by 47 million businesses and millions of physical payment devices.
Data submitted to the Securities and Exchange Board of India (SEBI) indicates that PhonePe has established a significant presence across the Indian market. As of September 30, 2025, the number of registered merchants reached 47.19 million, covering 98.61% of all Indian pin codes. By March 31, 2025, this base represented 77% to 80% of India’s total trade and services merchant population.
In March 2025, the number of monthly active merchants stood at 11.31 million, accounting for approximately 54% of all active UPI merchants in the country. Daily active merchant engagement rose from 44.18% in March 2023 to 60.77% by September 2025.
PhonePe’s physical footprint is a key driver of its subscription-based income. Currently, 9.19 million deployed devices serve more than just payment functions; smart speakers act as communication tools, providing merchants with business updates and alerts. This hardware network is maintained by a large team of 25,657 members and over 31,000 appointed agents, focusing on expansion in rural areas.
The fastest-growing segment in the DRHP is likely merchant lending. According to IPO documents, PhonePe leverages transaction data from its 47 million merchants to offer loans to partner lenders without any guarantees.
Loan disbursement increased from ₹0.11 billion in FY 2023 to ₹45.07 billion in FY 2025. In the first half of FY 2026 alone, loan income reached ₹2,880.87 million, nearly 88% of the previous year’s total income.
The merchant payments segment alone generated ₹19,910.36 million in revenue in FY 2025, representing about 28% of PhonePe’s total operating income. With the total payment value (TPV) in the merchant segment expected to reach ₹15 trillion annually, the company has successfully transformed its extensive payment network into a high-value financial services platform.
My name is Ganpat Singh Choughan. I am an experienced content writer with 7 years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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