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Mumbai: Prosus-owned fintech giant PayU is preparing to raise up to $300 million in a minority stake sale as part of its strategy to gear up for a much-anticipated initial public offering (IPO) in 2026. According to people familiar with the development, the company is working closely with HSBC Investment Bank to structure the transaction, which is currently in its early stages.
The fundraising plan is aimed at diversifying PayU’s shareholder base, strengthening its market positioning, and providing a valuation benchmark ahead of the listing. This move signals the company’s intent to test investor appetite for one of the largest upcoming IPOs in the Indian fintech sector.
A Pre-IPO Strategy
PayU’s plan to raise between $250 million and $300 million is being viewed as a strategic step to showcase investor confidence and set the stage for its public listing. Sources indicated that the company has been taking a series of steps to enhance governance and operational readiness, including the recent expansion of its board of directors.
“PayU is looking to raise approximately $250–300 million to diversify its shareholder base and strengthen its market position as it gears up for its IPO. The company has recently strengthened the board to reinforce governance and is taking additional steps to support sustainable growth,” said a person aware of the matter.
Prosus’s Continued Backing
Global consumer internet group Prosus, which is the majority shareholder in PayU, continues to demonstrate strong support for the payments and lending business. Earlier this year, Prosus infused $35 million into PayU’s credit vertical and backed its strategic stake acquisition in Mindgate Solutions, a real-time payments technology firm.
PayU acquired a 43.5 percent stake in Mindgate in March 2025. The acquisition is seen as a critical investment in India’s fast-growing UPI ecosystem, as Mindgate is among the largest technology providers enabling real-time payment solutions for some of the country’s biggest banks.
This backing underscores Prosus’s confidence in India’s booming digital finance sector, where PayU is already a leading player.
PayU’s Business Snapshot
PayU India is one of the largest digital payments companies in the country, enabling businesses of all sizes to accept payments via UPI, cards, wallets, EMIs, and QR codes. The platform currently serves over 500,000 merchants and has positioned itself as more than just a payment processor by offering enterprise-grade value-added services.
These include:
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Fraud protection and risk management tools
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Analytics and business insights
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Tokenisation for secure transactions
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Split payments and reconciliation features
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AI-driven recommendations
The company has also launched no-code tools such as payment links and invoicing, which simplify the process for small and medium enterprises (SMEs) to start accepting digital payments quickly.
On the lending side, PayU operates under a Reserve Bank of India (RBI)-approved NBFC licence. Its offerings include instant personal loans, business loans, EMIs, and Buy Now Pay Later (BNPL) products, targeted at individuals and businesses underserved by traditional banks.
Revenue streams for PayU are divided between transaction fees from the payments business and interest/processing charges from lending services.
IPO Journey and Timeline
PayU’s journey to the stock markets has seen some delays. The company had initially considered a market debut as early as 2023, but those plans were postponed. In June 2025, Prosus Chief Financial Officer Nico Marais confirmed that a listing in 2025 was not a priority.
“While Prosus had hoped to list PayU by 2025, that is not going to be our focus in the next year. Our focus is actually going to be to improve that business,” Marais had told Reuters.
With the proposed fundraising now in motion, the IPO timeline has been shifted to 2026, with the pre-IPO stake sale expected to help benchmark valuation and build investor confidence.
The Bigger Picture: India’s Digital Payments Boom
PayU’s fundraising and IPO come at a time when India’s digital payments ecosystem is witnessing unprecedented growth. Unified Payments Interface (UPI) transactions have crossed billions monthly, driven by consumer adoption, merchant acceptance, and government support for a cashless economy.
Fintech companies like PayU are capitalising on this surge, competing with other major players in the space such as Razorpay, PhonePe, and Paytm. What sets PayU apart is its dual strength in both payments and lending, supported by Prosus’s global expertise and capital backing.
Industry analysts believe that PayU’s IPO will not only give investors an opportunity to participate in India’s digital payments growth story but also provide a valuation benchmark for the sector.
What Lies Ahead
As PayU readies itself for the fundraising and eventual IPO, the company’s focus will likely remain on:
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Strengthening compliance and corporate governance frameworks
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Expanding its lending portfolio responsibly
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Scaling merchant and consumer adoption of digital financial services
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Leveraging AI, data analytics, and partnerships to enhance offerings
With Prosus’s backing and a clear roadmap, PayU’s $300 million fundraise may set the stage for one of the most significant fintech listings India has seen in recent years.
#PayU #Prosus #Fintech #DigitalPayments #IPO2026 #UPI #HSBC #IndiaBusiness #NBFC #Paytech #DigitalIndia #StartupNews #FinanceNews #VentureCapital #IPOUpdate #IndianEconomy
