PhonePe Limited IPO

The company has a history of net losses and negative cash flows from operating activities. The company had restated profit/ (loss) of Rs.(14,444.22) million, Rs.(12,032.05) million, Rs.(17,274.10) million, Rs.(19,961.71) million and Rs.(27,960.69) million for the six months period ended September 30, 2025 and 2024 , and Fiscal Years 2025, 2024 and 2023, respectively. The company had negative net cash flows used in operating activities of Rs.(1,172.71) million, Rs.(6,291.52) million and Rs.(7,682.50) million for the six months period ended September 30, 2025 and in Fiscal Years 2024 and 2023, respectively. The company has also experienced negative cash flows used in investing activities and financing activities in the past.The company may continue to incur losses and negative cash flows in the future, which may have an adverse effect on its operations and growth plans.

The company's Consumer Payments offering accounted for 56.14%, 68.84%, 63.34%, 71.56% and 82.91% of its revenue from operations for the six months period ended September 30, 2025 and 2024 , and Fiscal Years 2025, 2024 and 2023, respectively. Any disruption in the company's Consumer Payments offering could adversely affect its business, financial condition, results of operations and cash flows.

In the event that its payment processing charges payable to financial institutions increase significantly, and the company are not able to pass on these higher processing charges to its merchants or consumers, the company's margins and profitability may decrease significantly.

In line with the extant UPI guidelines, we participate in the UPI payment system through Payment System Provider ("PSP") banks. Consequently, we are dependent on the three sponsor PSP banks, namely Yes Bank Limited, Axis Bank Limited, and ICICI Bank Limited. Any change in commercial terms, disruption, failure, or operational breakdown within one or more of these payment networks, banks (including PSP banks), especially if occurring simultaneously, could have an adverse effect on its business.

NPCI has issued a Volume Cap Circular (as defined below), proposing a cap of 30% on the total volume of UPI transactions which has been deferred until December 31, 2026 (calculated as the overall volume of transactions processed in UPI during the preceding three months on a rolling basis) that may be processed by any single TPAP. If further guidelines are promulgated by NPCI to implement and enforce the Volume Cap Circular, it may impact its ability to onboard new UPI users, and thereby our business operations, financial performance, cash flows and overall growth trajectory may be adversely affected.

The company's total revenue from payment services was Rs.34,058.60 million, Rs.29,613.21 million, Rs.64,979.39 million, Rs.48,583.38 million and Rs.28,459.65 million for the six months period ended September 30, 2025 and 2024 , and Fiscal Years 2025, 2024 and 2023, respectively, representing 86.92%, 92.32%, 91.33%, 95.94% and 97.66% of its revenue from operations for such periods/ fiscal years, respectively. Any downturn in customers' willingness to use our payments services could have a material adverse impact on the company's business, financial condition, results of operations and cash flows.

If the company is unable to retain or expand our network of users, merchants, lending partners, insurers, or other business partners, the company's business, financial condition, results of operations, cash flows and prospects could be materially and adversely affected.

The company's operations are subject to various legal and regulatory requirements, including oversight and inspection by most of the major Indian financial regulators, including the Reserve Bank of India ("RBI"), Securities and Exchange Board of India ("SEBI"), and Insurance Regulatory & Development Authority of India ("IRDAI"), as well as other authorities of the Government of India ("GoI") such as the Unique Identification Authority of India ("UIDAI") and the Department of Telecommunications ("DoT"). Any changes in, or non-compliance with, applicable legal or regulatory requirements may adversely affect its operations.

The company is subjects to cybersecurity risks that could lead to disruptions of its operations and additional costs that adversely affect the company's reputation, brand, business, financial condition, results of operations and cash flows.

The company's success depends on the continuing efforts of its employees including Key Managerial Personnel and Senior Management, and the company's ability to recruit and retain talent. If the company fails to hire, retain or motivate its employees, maintain the company culture and our values as the company grows, the company's business may suffer.