The facts behind the offer for sale
The IPO is structured as an Offer for Sale (OFS), with majority shareholder Walmart divesting approximately 9 per cent of its stake.
However, this sale is primarily driven by regulatory requirements rather than investment strategy.
SEBI mandates a minimum public float of around 10per cent for listed companies, making Walmart’s partial divestment necessary to enable the IPO itself.
Beyond Walmart, only two other shareholders are participating in sales, Tiger Global (0.2 per cent) and Microsoft (0.7per cent). Notably, all other minority shareholders have chosen not to sell any shares in the IPO.
General Atlantic doubles down on the company
Recent media reports referencing the Updated Draft Red Herring Prospectus (UDRHP) have discussed General Atlantic’s 2025 transaction, where the firm increased its stake to 8.9per cent through a USD 600 million investment.
Interestingly, as a part of this transaction, the founders and employees exercised their vested stock options and converted them into shares. They have sold only 39per cent of their shares to General Atlantic, to cover the associated tax liabilities. This was a tax-planning exercise, not a liquidity event. No founders or employees received personal liquidity from this transaction.
What this signals for the IPO
The fact that the OFS is at the bare minimum SEBI levels is telling. The founders, employees, and the vast majority of investors are retaining their holdings, demonstrating long-term conviction in PhonePe’s growth trajectory and confidence in the company’s fundamentals and market position.
In an era where early exits and secondary sales are common during an IPO, PhonePe’s shareholder base is choosing to stay invested, betting on the company’s future value creation rather than near-term liquidity.