Exclusive: PayU Bags INR 1,013 Cr Via Rights Issue From Parent Prosus

SUMMARY

The board of PayU issued 13 Cr equity shares of face value of INR 10 each at a premium of INR 67.96 per share to raise the sum from MIH Payments Holdings BV

MIH Payments Holdings BV is the investment arm of the Naspers Group, which holds a 73.27% controlling stake in Prosus

The rights issue comes months after Prosus president and chief investment officer Ervin Tu said that the investment firm was aiming to list PayU on the Indian bourses in 2025

PayU has raised INR 1,013 Cr (around $120 Mn) from its parent and Dutch technology investor Prosus via a rights issue as the digital payments major gears up for its initial public offering (IPO).

The board of PayU issued 13 Cr equity shares of face value of INR 10 each at a premium of INR 67.96 per share to raise the sum from MIH Payments Holdings BV, as per its regulatory filings accessed by Inc42.

MIH Payments Holdings BV is the investment arm of the Naspers Group, which holds a 73.27% stake in Prosus.

Both PayU and Prosus declined to comment on Inc42’s queries on the development.

Prosus initially planned to take PayU public in India in 2024 at a valuation of $5 Bn to $7 Bn. While this did not materialise, Prosus president and chief investment officer Ervin Tu said last November that the consumer internet company was aiming to list PayU on the Indian bourses in 2025.

“We’re late into 2024 already, but we hope that it could be a 2025 event,” Tu said then.

PayU’s India Journey

Founded in 2002 by Nitin Gupta, Shailaz Nag Jose Velez, Martin Schrimpff, Arjan Bakker, and Grzegorz Brochocki, PayU is the digital payments and lending arm of Prosus. In 2011, Ibibo launched PayU PG for websites to integrate ecommerce transactions with online payments.

In 2014, the entity was demerged from Ibibo to form PayU India, with Nitin Gupta and Shailaz Nag as its cofounders.

Three years later, PayU forayed into the lending business with the launch of LazyPay. It further bolstered its presence in the segment by purchasing stakes in ZestMoney and PaySense. After a 15 month-ban on onboarding new merchants on its platform, PayU got an in-principle approval from the RBI last year to operate as a payment aggregator. PayU claims to serve over 4.5 Lakh merchants in India.

It is pertinent to note that Prosus sold the global payments organisation business of PayU, which provided ecommerce payment solutions to merchants across Latin America, Central and Eastern Europe, and Africa, to Israel’s Rapyd for $610 Mn in 2023 to focus on the Indian payments and credit market.

For the six months ended September 30, 2024 (H1 FY25), PayU India reported a revenue of $319 Mn from its core payments and credit business, up 28% from $254 Mn in the same period in the prior fiscal. PayU India accounted for roughly half of the $636 Mn revenue generated by Prosus’ consolidated payments and fintech segment.

Fintech Startups Fast-Track IPO Plans

PayU is not the only new-age fintech company getting ready for IPO. Its rivals Razorpay, PhonePe, Groww and Pine Labs are also preparing for public listings.

Earlier this month, Razorpay and PhonePe converted into public companies in preparation for their IPOs. While Razorpay is in the process of redomiciling its base to India, PhonePe completed the transition in 2023.

Last month, Pine Labs CEO Amrish Rau also said that the company plans to float its IPO in the second half of 2025. In April, the fintech giant got the final nod from the NCLT for its ‘reverse flip’ to India. Besides, Groww and KreditBee are also in different stages of their IPO preparations.

Prosus’ Portfolio Startups Make A Beeline For Bourses

Prosus is one of the top startup investors in India, having invested in new-age tech companies like Swiggy, PharmEasy, Captain Fresh, Urban Company, BlueStone, Mintifi, among others.

Swiggy’s $10 Bn IPO last year proved to be a goldmine for Prosus, with it raking in $2 Bn from its investment in the consumer internet company.

After its H1 FY25 disclosures, Prosus CEO Fabricio Bloisi said last year that several startups from its Indian portfolio were in the position to go public over the next 12-18 months. These included Urban Company, BlueStone, BRND.ME (formerly Mensa Brands), Eruditus, PayU, among others.

Earlier this week, consumer services unicorn Urban Company filed its draft red herring prospectus (DRHP) with SEBI for INR 1,900 Cr IPO. The markets regulator also approved BlueStone’s draft IPO papers for INR 1,000+ IPO earlier this month.

[Edited by Vinaykumar Rai]