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BENGALURU: Razorpay Software Limited has reportedly secured SEBI approval for an initial public offering of ₹5,000 crore to ₹6,000 crore. Media reports citing sources put the clearance at around 4 November 2026. Notably, the company is said to be targeting a valuation of about $5 billion. Razorpay has not yet published a prospectus. Consequently, the figures below remain reported rather than confirmed.
A lower price, a bigger stage
The $5 billion target is about 33% below the $7.5 billion valuation of Razorpay’s 2021 round. That round raised $375 million at the peak of the venture cycle. Consequently, backers such as Peak XV Partners, Tiger Global, GIC and Y Combinator are positioned to accept a lower mark in return for liquidity. Moreover, the company filed its draft prospectus confidentially in June 2026. That route, introduced by SEBI in November 2022, allows an 18-month launch window after approval. Meanwhile, shareholders approved a fresh issue of up to ₹2,700 crore in May 2026, and a pre-IPO placement is under evaluation. Axis Capital, Kotak Mahindra Capital, JP Morgan and Citigroup are reported as lead managers. Listing is expected between January and March 2027, though December 2026 is possible.
The tax of coming home
Razorpay originally incorporated its parent in the United States. It completed a reverse flip to India in May 2025, after converting into a public limited company in April. The move carried an estimated tax cost of $150 million to $300 million. Nevertheless, the company judged domestic liquidity and valuation depth worth that price. Encouragingly, Meesho, Groww and Pine Labs are reportedly following similar paths. Razorpay’s listing may therefore serve as an early test of the model.
Beyond the gateway
Founded in 2014 by Harshil Mathur and Shashank Kumar, Razorpay began as a payment gateway. It now serves over 8 million businesses and had passed $150 billion in total payment volume by early 2024. Furthermore, it has added RazorpayX for business banking and a Dynamic QR Soundbox for offline merchants. Payroll software, the Engage marketing suite and an AI assistant called RAY complete the stack. Its tools help SMEs accept payments, run payroll and access working capital, which fits the formalisation push. Digital public infrastructure now accounts for about 2% of GDP. Notably, Razorpay also holds an IFSCA payment service provider licence in GIFT City for multi-currency collections and remittances. Meanwhile, the Indian payment gateway market is projected to grow from $2.07 billion in 2025 to $4.01 billion by 2031.
Growth, margins and a ₹1,209 crore loss
FY25 operating revenue rose 65% to ₹3,783 crore from ₹2,296 crore. Gross profit grew a slower 41% to ₹1,277 crore. Consequently, implied gross margin slipped from about 39.4% to 33.7%, a pattern consistent with lower negotiated take-rates on large enterprise merchants. Razorpay also reported a net loss of ₹1,209 crore, which reports attribute largely to the reverse flip tax and one-time ESOP costs. However, the confidential filing keeps segment profitability and core EBITDA out of public view. Therefore, the final prospectus will carry the real evidence on whether the underlying business is profitable.
What could weigh on the price
Peers set the yardstick. Paytm posted an FY26 net profit of ₹552 crore on revenue of ₹8,437 crore, with positive EBITDA of ₹502 crore. By simple arithmetic, $5 billion equals roughly 13 times Razorpay’s FY25 revenue against about 11 times for Paytm. Razorpay’s faster growth of 65% against Paytm’s 22% may justify the gap, though the figures cover different years. Moreover, UPI carries zero merchant discount rate and makes up about 81% of retail digital volume. A tiered MDR could unlock an estimated ₹6,000 crore to ₹16,000 crore a year for the industry, though no such policy exists. Separately, PhonePe paused its $1 billion IPO in March 2026 amid market volatility.
What to watch
Several details will decide how the issue is received. First, the final prospectus is expected before March 2027 and should reveal the split between fresh issue and offer for sale. A larger fresh component would put more capital into the business. Second, investors will look for adjusted EBITDA stripped of the tax and ESOP effects. Likewise, lock-in terms for early backers will shape post-listing supply. Furthermore, any move on UPI charges or caps on card and net-banking fees would affect revenue directly.
A listing at $5 billion would mark a reset rather than a retreat. Razorpay would trade a higher private paper valuation for public capital and a domestic investor base. Encouragingly, FY25 revenue grew 65%, the product stack is widening and peers such as Paytm have shown that Indian markets reward profitable execution. Ultimately, the prospectus will show whether margins can follow scale. If they can, Razorpay’s debut could strengthen the case for B2B fintech and for other startups that plan to list at home.
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