Walmart Inc and other PhonePe shareholders will have to pay nearly $1 billion in tax after the digital payments company shifted its headquarters to India, Bloomberg News reported on Wednesday, citing people familiar with the matter.
PhonePe is raising funds at a $12 billion pre-money valuation from General Atlantic, Qatar Investment Authority and others, triggering the hefty charge, according to the report.
The fintech firm was last valued at around $5.5 billion in December 2020, based on multiple media reports.
Investors including Tiger Global Management have now purchased shares of PhonePe in India at the new price, leading to tax implications of roughly Rs 8,000 crore ($966.13 million) for existing shareholders, Bloomberg News reported.
PhonePe, Walmart and Tiger Global did not immediately respond to Reuters requests for comment.
Walmart said last month it had completed the separation of PhonePe from Indian ecommerce giant Flipkart, adding that it would remain a majority stakeholder in both the companies.
In September, PhonePe said it has completed the process of moving its domicile from Singapore to India.
PhonePe was founded by ex-Flipkart executives Sameer Nigam, Rahul Chari and Burzin Engineer, and was acquired by Flipkart in 2016. In 2018, Flipkart was acquired by Walmart, and PhonePe was part of the transaction as well.
Since its launch, PhonePe has successfully digitised more than 35 million offline merchants spread across Tier 2, 3, 4 cities and beyond, covering 99 per cent of pin codes in the country, the statement said.
Byju stake
Edtech major Byju’s founders Byju Raveendran and Divya Gokulnath are planning to increase their stake in the company to about 40 per cent and have initiated discussion with investors, sources aware of the development said on Wednesday.
The founders jointly hold around 25 per cent stake in the company at present.
“There is an intention of Byju’s founders to double their stake in the company. The discussions are at an exploratory level with investors to raise debt,” the source told PTI on condition of anonymity.
Byju’s founders raised their stake from 23 to 25 per cent in May 2022 in a $800 million funding round led by Byju Raveendran.
The edtech major has claimed that it will turn profitable by March. Byju’s reported a loss of Rs 4,588 crore in 2020-2021 compared with Rs 232 crore in 2019-20.
Revenues also recorded a drop in FY21 to Rs 2,428 crore from Rs 2,511 crore in FY20. The company is also planning to focus more on inside sales calls, email, and video calling to reduce operational costs.
Chan Zuckerberg Initiative (CZI), founded by Mark Zuckerberg and Priscilla Chan, Prosus Ventures, Sequoia Capital India, Bond, Silver Lake, Owl Ventures, UBS, Blackrock and Sands Capital Management, among others, have invested in the edtech firm. The company had raised $250min its last funding round.
