Archive · 16 Sep 2026
UPI MDR Move Brings PhonePe IPO Filing Closer
PhonePe is a company that helps people and businesses make digital payments.
It was planning to sell shares to the public through an IPO, but it postponed those plans.
A new fee called MDR will be charged on some large UPI payments starting October 15.
This fee is paid by merchants for processing digital transactions.
PhonePe’s CEO said the new income opportunity could help the company move closer to filing its IPO papers.
He did not give a firm filing date.
PhonePe processes about 11.5 billion transactions each month.
The company reported higher revenue in FY26 than in FY25.
Analysts believe PhonePe could receive part of the new MDR collections.
PhonePe CEO Sameer Nigam said UPI MDR could move the company closer to filing for an IPO.
The National Payments Corporation of India announced a 0.4% MDR on UPI transactions above Rs 2,000, effective October 15.
PhonePe reported FY26 consolidated revenue of Rs 7,920 crore, up 11% from Rs 7,115 crore in FY25.
PhonePe had postponed its IPO plans after receiving Securities and Exchange Board of India approval in January.
Analysts estimate total UPI MDR collections at Rs 13,000 crore to Rs 26,000 crore, with PhonePe potentially receiving a share.
- Who
- PhonePe and its co-founder and CEO Sameer Nigam, along with the National Payments Corporation of India.
- What
- A new UPI merchant discount rate could increase PhonePe’s revenue opportunity and bring its postponed IPO filing closer.
- When
- The 0.4% MDR is scheduled to begin on October 15; Nigam did not provide a firm IPO filing date.
- Where
- The development concerns India’s UPI payments network and PhonePe, which is based in Bengaluru.
- Why
- The MDR could create additional revenue for UPI apps and merchant-facing entities, potentially improving PhonePe’s IPO outlook.
Case for Earlier IPO Filing
Reasons for Caution
Revenue impact of UPI MDR
Case for Earlier IPO Filing
The new MDR could create additional revenue for PhonePe, and its large UPI market share and merchant-acquisition role could allow it to receive part of the collections.
Reasons for Caution
The precise financial benefit remains uncertain because MDR has only been announced and Nigam said it still needs to settle.
IPO timing
Case for Earlier IPO Filing
Sameer Nigam said the MDR move would push PhonePe closer to filing from a business standpoint and that timelines could become sooner.
Reasons for Caution
Nigam did not provide a firm filing date and said other variables were still being considered.
Investor expectations
Case for Earlier IPO Filing
A positive response to MDR could address investor questions about how UPI monetization affects consumers and merchants.
Reasons for Caution
PhonePe previously postponed its IPO because of geopolitical uncertainties and prevailing investor sentiment.
- New MDR
- A 0.4% merchant discount rate will apply to UPI transactions above Rs 2,000 from October 15.
- FY26 revenue
- PhonePe reported consolidated revenue of Rs 7,920 crore, up from Rs 7,115 crore in FY25.
- Monthly transactions
- PhonePe processes around 11.5 billion transactions each month.
- Monthly transaction value
- PhonePe’s total monthly transaction value exceeds Rs 14 lakh crore.
- PhonePe market share
- PhonePe commands more than 45% of the UPI market.
- Estimated MDR pool
- Brokerages and analysts estimate total MDR collections of Rs 13,000 crore to Rs 26,000 crore.
- Potential IPO size
- PhonePe was previously reported to be considering a $1.3 billion IPO at a valuation of about $13 billion to $15 billion.