PhonePe FY26 revenue rises 11 per cent as losses widen ahead of planned IPO

Mumbai: PhonePe’s road to the stock market may have hit a few speed bumps, but the fintech giant is still moving ahead at pace. India’s largest UPI player reported double-digit revenue growth in FY26 even as investments in new businesses and policy changes pushed losses sharply higher.

IPO-bound PhonePe reported consolidated revenue of Rs 7,920 crore for FY26, up 11 per cent from Rs 7,115 crore in FY25, according to regulatory filings with the Ministry of Corporate Affairs.

The Bengaluru-based company, which commands more than 45 per cent of India’s UPI payments market, posted a consolidated net loss of Rs 2,792 crore during the year, widening 62 per cent from Rs 1,727 crore in FY25.

The slower pace of revenue growth came after several headwinds affected the business during the financial year. These included the suspension of credit card-based rent payments for part of the year, the government’s ban on real money gaming transactions and the absence of UPI subsidy incentives under the Payments Infrastructure Development Fund (PIDF).

The company has since resumed credit card rent payments through a marketplace model, reviving the service a few months ago after the earlier suspension.

On a normalised operational basis, however, PhonePe’s FY26 net loss stood at Rs 1,377 crore. The wider consolidated loss primarily reflects continued investments in emerging businesses, including its stock broking platform share.market, e-commerce venture Pincode, insurance business and Indus Appstore.

According to the company’s filings, a significant portion of the reported losses also arose from non-recurring and non-operational accounting adjustments, including employee stock ownership plan expenses and losses incurred by subsidiaries.

In its updated draft red herring prospectus, PhonePe had informed prospective investors that suspending credit card-based rent payments would reduce revenue by an estimated Rs 550 crore to Rs 600 crore during the second half of FY26.

The company had also projected an annual revenue impact of around Rs 150 crore following the government’s restrictions on real money gaming transactions.

After excluding discontinued and policy-driven revenue streams such as rent payments, real money gaming and PIDF incentives, PhonePe’s adjusted operating revenue for the first half of FY26 stood at Rs 3,162 crore.

Revenue accelerated in the second half, reaching about Rs 3,746 crore, reflecting stronger growth across the company’s core businesses despite the regulatory changes.

One of the biggest contributors to that momentum has been lending. Industry sources estimate that PhonePe’s lending platform is now facilitating credit disbursements at a monthly run rate of around Rs 2,600 crore.

If sustained, that would translate into nearly Rs 30,000 crore of loan disbursements in FY27, placing the company among India’s largest digital lending distribution platforms. For comparison, Paytm reported revenue of Rs 8,437 crore in FY26, although it no longer discloses the total value of loans facilitated through its platform.

PhonePe currently serves around 15 crore active consumers and has built a merchant network of approximately 1.8 crore businesses, reinforcing its position as the country’s largest digital payments platform.

The company had earlier postponed its initial public offering, citing geopolitical tensions in the Middle East and volatile equity markets. With revenue continuing to grow and newer businesses gradually scaling up, PhonePe is expected to revive its IPO plans later this year as market conditions improve.