Iran war shakes stock market, PhonePe IPO on hold

Citing the effect of the ongoing Iran war on investor morale and the broader stock market, PhonePe Ltd. has postponed its much anticipated first public offering (IPO) in India.

On its UPI app, PhonePe has made biometric payments possible.

“We genuinely hope that all impacted areas would quickly return to peace. “We are still dedicated to going public in India,” PhonePe Sameer Nigam stated.

According to reports, the Walmart Inc.-controlled fintech company was aiming for an IPO valuation of $9–10.5 billion. That was already less than the $12 billion valuation the business received when it raised $100 million in 2023.

According to Draft Red-Herring Prospectus (DRHP) submitted to India’s market regulator, Walmart intends to sell around 12% of the PhonePe IPO, providing investors Tiger Global and Microsoft Corp. with an exit. In the PhonePe IPO, they would together sell 50.7 million shares. There won’t be any new shares available.

Due to the impact of the Iran conflict on the stock market, the possibility of a protracted issuance drought is quickly emerging on Dalal Street after two record-breaking years for IPOs in India.

Bloomberg’s data shows that Indian companies raised $1.5 billion via primary offerings in the current quarter, compared to $2.3 billion in the same period last year.

This contraction is the most obvious sign yet that one of the most active IPO marketplaces in the world is firmly cooling. Growing macroeconomic concerns, such as worries about an approaching economic recession, persistent inflows of foreign capital, and a declining Indian rupee, exacerbate the retreat.