With UPI MDR Clarity, PhonePe Eyes IPO By March 2027

PhonePe is set to revive its initial public offering (IPO) plans and is targeting a public listing between February and March 2027, sources told Inc42 The new UPI MDR framework gives PhonePe greater clarity on monetising its core payments business after years of zero MDR PhonePe will look to refile its IPO papers by the end of this year, seeking a valuation of $10 Bn, sources told Inc42 With greater clarity around the monetisation of UPI payments following’ the introduction of a new Merchant Discount Rate (MDR) framework, Walmart-backed fintechPhonePeis set to revive its initial public offering (IPO) plans, which wereput on hold earlier this year. Sources told Inc42 that the fintech startup is now targeting a public listing between February-March 2027. “They have an almost 45% share of merchant payments. With greater clarity on the MDR regime, PhonePe is now looking to revise its IPO plans and could target a listing between February and March 2027,” the sources said. PhonePe will look to file its updated IPO papers by the end of this year, seeking a valuation of $10 Bn, sources in the know told Inc42 on the condition of anonymity. PhonePe declined to comment on this development. Notably, theMDR framework was introduced by the Central government yesterday, bringing charges back on select UPI merchant transactions beginning October 15. The move marks a shift from the broad zero-MDR regime in place from 2020. The charges will apply only to select transactions, with merchant UPI payments above ₹2,000 attracting a 0.4% MDR. However, person-to-person (P2P) transactions up to ₹2,000 will continue to remain free. Small merchants receiving up to ₹1 Lakh a month through UPI QR payments will also be exempt. A lower MDR of 0.02%, capped at ₹300, will apply to capital market payments, including transactions involving stockbrokers, securities dealers, mutual funds and investment platforms. The revised framework gives PhonePe, which has long been the UPI market leader, a greater clarity on monetising the service following years of no revenue. After filing for an confidential IPO in September 2025,PhonePe had filed its updated DRHPin March post receiving the SEBI’s approval for its OFS-only IPO. Existing investors including Walmart, Tiger Global and Microsoft were expected to sell shares. The IPO was earlier expected to value PhonePe at $9 Bn-$10.5 Bn, with the offering size estimated to be in the range of $900 Mn-$1.5 Bn. In its updated DRHP, PhonePe noted that UPI payments carried an MDR until 2020, allowing payment apps, aggregators and banks to earn revenue from transactions. The government later scrapped the MDR on UPI and RuPay payments to boost digital payment adoption. PhonePe’s DRHP also cited calls from the Payments Council of India to review the zero-MDR regime for large merchants and RuPay debit card transactions. The startup said a “carefully structured MDR regime” could support investments in infrastructure, innovation and merchant acquisition, whi