Merchant payment processing unicorn Razorpay is gearing up for an Initial Public Offering (IPO) in the next two years. The company is in the final stages of its process to relocate its parent entity from the US to India, which is expected to wrap up within the next six to twelve months. Let us take a look at Razorpay’s IPO Plans post-FY24.
Razorpay News: Key Highlights of the Upcoming IPO
- Razorpay prepares for IPO post-FY26, with India domicile process underway.
- CEO Harshil Mathur expects an IPO two years after the business break-even.
- The transition from the US to India was initiated in May 2023, ahead of listing plans.
- New products unveiled, including Payment Gateway 3.0 and AI assistant tool, Ray.
CEO Harshil Mathur stated, “We’ve started the process of moving to India, which will take 6-12 months. We’ve factored in all costs… We’re looking at an IPO two years after our businesses break even.”
Razorpay IPO: Transition to India and Financial Overview
The company initiated the process of shifting its parent entity from the US to India in May 2023, aligning with its plans for listing in Indian bourses. Supported by prominent investors and boasting substantial annual payment volumes, Razorpay aims to strengthen its position in the market.
About the Company
Razorpay is a fintech company that offers a range of products to accept, process, and disburse payments online. It supports various payment modes, such as credit cards, debit cards, net banking, UPI, and wallets.Â
It also provides solutions for business banking, payroll, lending, and more. Razorpay aims to simplify and automate the financial operations for businesses of all sizes.
With a focus on profitability and innovation, the company is set to capitalise on emerging opportunities in the payment processing landscape.
Razorpay Valuation
Razorpay began its transition to India from the United States in May 2023, aligning with its goal to list on the Indian stock exchanges. Founded in 2014, the company has garnered substantial investments totaling over $740 million, with a valuation surpassing $7 billion.
As of February 2023, Razorpay recorded an annualised total payment volume (TPV) of around $150 billion, compared to $90 million in 2022.
Future Growth Prospects
Mathur anticipates a moderate growth rate of 35-40 percent in the upcoming fiscal year. With the ability to onboard new merchants, Razorpay aims for increased growth in its payment gateway services.
Regulatory Milestones and Profitability
In December, Razorpay secured authorisation from the Reserve Bank of India (RBI) to operate as a Payment Aggregator (PA). This enabled the onboarding of new merchants after a two-year break.
The company’s payment business is already profitable. However, Razorpay plans to achieve profitability across all non-payment ventures before pursuing an IPO.
Innovation and Product Expansion
Razorpay unveiled several new products at its annual Razorpay FTX event in Bengaluru on February 23.
- Among these offerings is Payment Gateway 3.0. It features enhancements such as Trusted Badge, Coupon Codes, COD fraud protection, and quick buy technology.
- Additionally, the introduction of an AI assistant tool named Ray is worth noting. It aims to assist customers with payment-related queries and vendor transactions.
Conclusion
Razorpay’s IPO post-FY26 underscores its commitment to growth and market expansion. As the company finalises its transition to an Indian domicile, investors can anticipate significant developments in the payment processing sector.
Source- moneycontrol.com
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