India Ban Halves PhonePe’s Real Money Gaming Revenue

PhonePe experienced a sharp contraction in revenue linked to real money gaming during the first half of FY26 as India’s prohibition on the category took effect. The company disclosed in its updated draft red herring prospectus that income from the segment fell to ₹71 crore between April and September, compared with ₹147 crore in the same period of the previous financial year. The revenue decline coincided with preparations for a stock market listing.

The national policy shift stemmed from the Promotion and Regulation of Online Gaming Act, 2025, which came into force on 22 August 2025. The act outlawed real money gaming across the country. PhonePe stated that it ceased earning revenue from advertising and payment gateway services tied to real money gaming once the prohibition began. The company had generated consistent income from the segment in earlier years through such services.

Prior to the ban, the business recorded steady growth in real money gaming revenue across multiple financial years. It reported ₹245 crore in FY25, following ₹234 crore in FY24 and ₹208 crore in FY23. The reduction in H1 FY26 captured only part of the period after the legal change, illustrating the immediate effect of cutting off an established revenue stream.

PhonePe continued to expand its broader payments and financial services operations in the same period. Revenue from operations rose to ₹3,918 crore in the first half of FY26, compared with ₹3,207 crore a year earlier, representing a 22 percent year-on-year increase. For the full FY25, the company reported ₹7,114 crore in total revenue, supported by its role in the digital payments ecosystem and related financial products. The company indicated that reduced gaming-linked income did not materially affect its overall financial performance for the reporting period.

Loss trends over recent years reflected ongoing improvement on a full-year basis. The business reported a ₹1,727 crore loss in FY25, narrowing from ₹1,996 crore in FY24 and ₹2,796 crore in FY23. However, losses widened in the first half of FY26 to ₹1,444 crore, up from ₹1,203 crore in the same period of FY25. Higher operating costs were the primary driver of this shift, with marketing and user acquisition expenses rising significantly.

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Advertising and sales promotion spending increased to ₹455 crore in the first half of FY26, compared with ₹307 crore in the year-ago period, an increase of 48 percent. These expenses accounted for 7.51 percent of total revenue during the first half of the financial year. PhonePe stated that heightened spending would continue as it sought to further expand its user base and strengthen engagement.

The company is pursuing a public listing through an initial public offering structured entirely as an offer for sale. The IPO includes 5.06 crore equity shares held by existing shareholders, without any new capital raise. Promoter WM Digital Commerce Holdings, owned by Walmart International Holdings Inc, currently holds 71.77 percent of PhonePe and plans to sell 4.59 crore shares through the transaction, equal to 9.06 percent of paid-up equity. Tiger Global PIP 9-1 and Microsoft Global Finance Unlimited Company will sell the remaining 47.17 lakh shares.

Among public investors, General Atlantic Singapore PPIL holds an 8.98 percent stake in the company, while Headstand owns 5.73 percent. PhonePe has not announced any alternative gaming-related revenue arrangements under the current regulatory environment.

Source:

PhonePe’s RMG revenue drops to Rs 71 crore in H1 FY26 after regulatory ban, storyboard18.com, January 22, 2026