The instant payments company Phonepe, owned by the world’s largest retailer Walmart, has deferred its plan to launch an initial public offer (IPO) citing ongoing geopolitical conflicts and market volatility.
Capital market investors have lost more than 8.3% or about `34 trillion wealth since the war began in West Asia two weeks ago.
The company was planning to mop up at least $1.35 billion or `12,000 crore from the public issue, which would be an offer-for-sale by promoters and external investors. The issue would need more liquidity than the current market offers, the company said. The issue values the Bengaluru-based PhonePe.
Walmart, Tiger Global and Microsoft are the three major shareholders looking to make partial exits through the OFS, together diluting nearly 10% stake, according to the draft papers.
“We sincerely hope for a swift return to peace in all the affected regions. We remain committed to a public listing,” PhonePe CEO and founder Sameer Nigam said in a statement on Monday. The firm further said it will resume the listing process once there is some stability in global capital markets.
The fintech company received Sebi approval for the offering on January 20. It would have been the second-largest issue from a fintech firm after rival Paytm’s issue in late 2021 when the Noida-based firm raised `18,300 crore on a valuation of nearly $20 billion.
Despite US president Donald Trump seeking a coalition help to reopen the key energy artery had little success in containing the crude rally, as allies Germany, Japan and Australia said they were not planning on sending naval vessels.
At the interbank foreign exchange, the rupee opened at 92.44 and stayed close to its lowest-ever intra-day level of 92.47, trading at 92.43 against the greenback, registering a loss of 13 paise from its previous close. The unit has lost close to 5% YTD on the back of a 4.9% loss last year.
Another positive was that government data showing the trade deficit has narrowed to $27.1 billion in February as exports dipped only marginally by 0.81% to $36.61 billion while imports rose imports rose 24.11% to $63.71 billion in the month.
"The surge in oil prices since late February constitutes a significant terms-of-trade shock for the rupee, especially at a time when its non-oil trade deficit is also large," analysts at HSBC said Monday. Oil prices have risen over 40% since the war broke out and had touched nearly $120 last week.
HSBC has revised its rupee forecast lower to 92 by end-March compared with 88 earlier.
But UBS analysts are of the view that if the crude remains at or above $100 a barrel for a few more weeks, the rupee will plumb 95.
Meanwhile, the dollar index was a tad lower at 100.2 while Asian currencies traded mixed as investors also kept an eye on a string of central bank policy decisions due this week.
Weakness in the rupee was driven chiefly by heightened concerns over oil and gas supplies, after Iran effectively blocked the Strait of Hormuz earlier this month. The waterway supplies roughly 20% of the world’s oil, and is also a key channel for Indian oil and gas imports.
The country imports roughly 85% of its overall oil and gas consumption, half of which from the Gulf and all of that is carried through the Strait, leaving it heavily dependent on energy imports and vulnerable to any supply disruptions.