Razorpay Confidential IPO: Raise $700 M at $5-6 B Valuation

Razorpay, a Bengaluru-based payments and business banking platform, co-founded by Harshil Mathur and Shashank Kumar, is set to file its Draft Red Herring Prospectus (DRHP) confidentially with the Securities and Exchange Board of India (SEBI) in the coming few weeks. The company is targeting a valuation of $5-$6 billion, and a fundraise of $600 million-$700 million, a substantial reduction of its peak private valuation of $7.5 billion reached in the startup funding boom of 2021. Here, we are going to explore the confidential DRHP filing of Razorpay, its IPO process, and the company fundamentals in detail.What is a confidential IPO filing?In order to better understand the IPO process of Razorpay, it is first necessary to understand the meaning of the confidential filing and its importance. As per SEBI rules, companies are permitted to submit their draft prospectuses for an IPO to the regulator without immediately making their financials and operations public.This gives them the benefit of receiving guidance from the regulatory body, assessing investor interest, and tweaking their IPO prospectuses accordingly without coming under public pressure right away. It also gives them the leeway to withdraw their IPO offerings in the event of any sudden downturn in market conditions.Many new-age Indian tech companies have adopted this approach in the past few years, including Swiggy, Groww, etc., all of whom wished to avoid unnecessary publicity and alter their valuations before going public with their IPO announcements. Razorpay will most likely take the same route as well.The journey behind this IPOFounded in 2014, Razorpay aimed at creating an environment where online payments are affordable, fast, and easy to use by startup and SME companies in India, which previously had expensive, complex, and difficult-to-access payment gateways. Founded by IIT Roorkee graduates Harshil Mathur and Shashank Kumar, Razorpay was one of the earliest India-focussed startups.Over the last decade, Razorpay has come a long way and transformed itself into a full-stack financial solutions provider offering its users payment gateway solutions, point of sales systems, business banking through RazorpayX, etc.Two years of IPO preparationThe Razorpay move to bring its IPO to the Indian primary markets has been a well-calculated one. Its most important preparatory step was its reverse flip, i.e., transferring the domicile of its parent company to India. This was done in May 2025 at an approximate tax cost of approximately $150 million, a move that is increasingly being undertaken by Indian unicorns to facilitate easier compliance with regulatory requirements and access a domestic listing in the Indian stock market.Its conversion into a public limited company was also approved by the board of the company, since it is a mandatory regulatory requirement before listing. In February 2026, Razorpay had shortlisted four investment banks to handle its IPO offering, which consisted of names such as Axis Capital, Kotak Mahindra Capital, JP Morgan, and Citi. This was a clear sign that the company was not in the exploration phase but on to the active execution of its IPO plans. Razorpay’s financial snapshotIn the financial year ending in March 2025 (FY25), Razorpay had consolidated operating revenue of ₹3,783 crore with a healthy 65% year-on-year growth over ₹2,296 crore in FY24. It also had a Gross profit of ₹1,277 crore.However, the company also reported a net loss of ₹1209 crore, which included its Employee Stock Ownership Plan (ESOP) expenses and one-time expenses in its domicile transition. This loss, though substantial, has been due to accounting costs, rather than a fall in operations revenue.On the business front, the total payment value made through Razorpay has surpassed about $180 billion, compared to $150 billion in 2023 and $100 billion in 2022, which is an indicator of its widespread penetration into the Indian digital economy. Why is the valuation lower than the 2021 peak?The target valuation of the Razorpay IPO of $5- $6 billion is less than the $7.5 billion private valuation that Razorpay received in 2021. This decrease in IPO valuation upon entering the IPO market is not unique to Razorpay alone. The Indian public markets have become far more discerning over the period of time, and today investors are focusing on those companies that have their profitability plans and roadmaps ready, rather than those with high growth plans.The transformation is also an indication of the broader global trends.PhonePe, one of the most popular UPI apps in India, has recently halted its IPO plans because of the geopolitical tensions in West Asia and an unrealistically high valuation difference between its on-paper valuation and the offer by the public investors. Conversely, Razorpay seems to be more practical by agreeing to a valuation reset in order to get listing certainty.Why does this IPO matter?The Razorpay IPO would be one of the largest fintech IPOs in the history of India and a harbinger of the larger startup IPO pipeline. A successful listing would open the market to other tech and fintech brands that are about to go public.Also, this IPO would enable Razorpay to expand into cross-border payments and artificial intelligence-based financial services solutions, according to the changing digital payment environment in India. To investors, the IPO will offer them an opportunity to gain exposure to a full-fledged fintech platform that functions at the heart of the Indian digital payment network.The bottom lineThe confidential IPO filing of Razorpay is a milestone in the fintech history of India. The proposed IPO to raise $600-700 million, along with a decreased valuation, indicates the mature and disciplined approach of Razorpay to entering the Indian public market.To the broader market, this IPO is not merely a listing, but an example of how the startup ecosystem in India is developing, and how it is striking a balance between growth ambitions and financial soundness.With the company proceeding with its listing plans, Razorpay IPO will continue to be a name to watch among investors who are following the next wave of technology-driven IPOs in India.

Razorpay Confidential IPO: Raise $700 M at $5-6 B Valuation

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