Home Business Razorpay plans for an IPO after FY26, with the process of India domicile set to conclude within six months

Razorpay plans for an IPO after FY26, with the process of India domicile set to conclude within six months

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The unicorn company Razorpay, which processes merchant payments, is planning to pursue an Initial Public Offering (IPO) in two years, following the completion of its reverse flipping process to India, expected to conclude within the next six to twelve months.

“We’ve already started the process of reverse flipping to India, which we estimate will take between 6 to 12 months to finalize. We’ve accounted for all associated costs… Our IPO is anticipated to occur two years after our businesses become profitable,” explained Harshil Mathur, co-founder and CEO of Razorpay.

In May 2023, Razorpay began the process of relocating its main operations from the United States to India, in preparation for its listing on Indian stock exchanges.

Established in 2014 by Shashank Kumar and Mathur, Razorpay has garnered support from investors such as Y Combinator, GIC, Sequoia Capital India, Ribbit Capital, Matrix Partners, MasterCard, and others, with a combined investment exceeding $740 million. The company’s latest valuation stands at over $7 billion.

As of February 2023, Razorpay has achieved an annualized total payment volume (TPV) of approximately $150 billion. In 2022 alone, the firm recorded a TPV of $90 million.

“We anticipate a steady growth of 35-40 percent in the upcoming fiscal year. With the ability to onboard new merchants now, we foresee even more expansion in the Razorpay payment gateway,” Mathur remarked.

In December, Razorpay obtained the ultimate approval from the Reserve Bank of India (RBI) to function as Payment Aggregators (PA) and was granted permission to enlist new merchants on its platform after nearly two years.

The company’s payment operations are profitable, and it aims to achieve profitability in all its non-payment ventures too.

“Our payment business is already making a profit, but about 35-40 percent of our earnings come from non-payment ventures. Therefore, we aim to ensure profitability across all aspects before pursuing an IPO,” Mathur explained.

At the annual Razorpay FTX event held in Bengaluru on February 23, Razorpay unveiled several new products. This includes Payment Gateway 3.0, equipped with features such as Trusted Badge, Coupon Codes, COD fraud protection, and quick buy technology.

Additionally, the company introduced an AI assistant tool named Ray during the event. Ray is designed to assist customers with inquiries related to payments, payouts, vendor payments, and more.

Introducing new products

Meanwhile, the digital payments company continues to introduce fresh offerings in the realm of online payments while also venturing into the offline payment sector.

In December, the Reserve Bank of India (RBI) lifted a ban on Razorpay, allowing it to onboard new merchants for its payment aggregator business. Since then, the company has successfully brought on board 10,000 merchants.

Razorpay has unveiled a range of new products catering to direct-to-consumer (D2C) brands, e-commerce platforms, small online and offline businesses, as well as large corporations.

Among these offerings is Razorpay Payments Gateway 3.0, an AI-powered payment service aimed at reducing instances of financial fraud during online transactions, streamlining the payment process, and enhancing customer retention.

Top of Form

The Bengaluru-based payment company is now providing trust badges to selected merchants based on their checkout experiences, aiming to prevent cart abandonment due to fraud concerns.

Their new payment gateway (PG) offering will integrate with Ezetap point-of-sale (PoS) systems, allowing online shoppers to discover nearby offline stores for product trials and purchases.

For offline payments, they’ve introduced a dynamic QR code and contactless tap card payment product, targeting larger enterprises such as retail chains with a UPI-first interface.

Entering the loyalty and rewards management domain, they’ve launched Razorpay Engage HQ, building on their 2022 acquisition of Poshvine. This platform aims to assist brands in offering personalized offers both online and in-store.

In collaboration with tech giants Google and Open AI, Razorpay launched RAY, India’s first AI assistant for payments, payouts, and payroll functions.

Having secured $741.5 million in funding to date, the company’s latest funding round in December 2021, co-led by Lone Pine Capital, Alkeon Capital, and TCV, valued the startup at $7.5 billion.

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