PhonePe behind surge in Walmart’s share price

BENGALURU: PhonePe is being valued at $7 billion and it has emerged as a significant factor for a handsome uptick in Walmart's share prices going forward, the latest Morgan Stanley report said. In a bull case, PhonePe could be worth as much as $20 billion, said the report from the Wall Street major.

Due to the growing potential of PhonePe beyond just payments, Walmart's share prices could go up to $125 in the base case and $165 in bull case, the report added. This comes at a time when Walmart shares hit an all-time high of almost $118 in the US on Thursday.

This is the first time Phone-Pe's valuation is being put out formally amid talks of its fundraise. At the time that Walmart acquired a 77% stake in Flipkart last year, PhonePe was being valued at around $1.5 billion.

As reported in August, PhonePe is in talks to close a $1-billion fund-raise from a marquee set of investors, including Tiger Global, Tencent and DST Global. While the company has been in talks with investors for months, the valuation at which it agrees to raise money has been the core issue of debate.

Morgan Stanley said Phone-Pe could have a stronger revenue stream of about $1.4 billion (base case) from its foray into financial services. As of now, PhonePe sells only mutual funds but it has broader plans for the segment.

"We model bull case revenues of $70 million from payments, $690 million from the distribution of financial services, and $2.5 billion from consumer lending," it added. The revenue estimates are for 2029.