Razorpay IPO Hinges on a 0.4% UPI Fee and an Unsized FY25 Loss

Razorpay is lining up a ₹5,000 crore to ₹6,000 crore IPO at a reported valuation of about $5 billion, roughly a third below the $7.5 billion it commanded in December 2021, according to Inc42's Nov. 6 account. The number that will travel is the size of the raise. The numbers that decide whether it prices well are a 0.4 percent fee on large UPI payments and a FY25 loss that the company has not sized.

Inc42 reports that SEBI, India's securities regulator, has approved the issue, which is a mix of fresh shares and an offer for sale, with nearly half of the proceeds going to sellers. Listing is expected between January and March 2027, and Axis Capital, Kotak Mahindra Capital, JP Morgan and Citi are the reported bankers.

Announced and cleared are different words here. Business Today reported on June 16 that Razorpay had only filed its draft papers confidentially, putting the expected raise at ₹5,500 crore to ₹6,000 crore, and giving no valuation, bankers or fresh-versus-sale split. Neither Inc42's page nor Business Today's links a SEBI order or a Razorpay statement, so the approval rests on Inc42 alone.

What FY25 does and does not show

Razorpay's FY25 revenue was ₹3,783 crore, up 65 percent, per Inc42. The company also slipped into a loss, weighed down by ₹1,209 crore of employee stock option expense plus one-time restructuring and tax costs from moving its legal home to India. Inc42 puts the tax bill from that reverse flip at about ₹1,245 crore, or $150 million. The size of the loss was not disclosed.

The growth figure does not reconcile with the year before on its face. Inc42 lists FY24 payments-business profit of ₹34 crore on total revenue of ₹2,068 crore, a 1.6 percent net margin. Growing from ₹2,068 crore to ₹3,783 crore is 83 percent, not 65, which suggests the two figures cover different perimeters. A public draft prospectus would settle it.

Item	Figure	Per
FY25 revenue	₹3,783 crore	Inc42
FY25 ESOP expense	₹1,209 crore	Inc42
Reverse-flip tax	about ₹1,245 crore	Inc42
FY24 payments profit	₹34 crore	Inc42

The 0.4 percent UPI fee

Inc42 reports a 0.4 percent merchant discount rate, the fee a merchant pays on a payment, on large UPI payments, due after Diwali. Razorpay has not said how many of its tickets exceed the ₹2,000 threshold. About half of its payments flow through UPI.

Inc42 estimates the fee could add ₹192 crore to ₹461 crore a year. That is 5 percent to 12 percent of FY25 revenue and 15 percent to 36 percent of FY25 gross profit. The gross-profit share is the larger story: the same fee that adds up to 12 percent to revenue adds up to 36 percent to gross profit.

1. Low estimate192 ₹ crore
2. High estimate461 ₹ crore

Source: Inc42, Nov. 6, 2026, accessed 2026-11-06

The range is wide because aggregators are reported to be in talks about keeping 50 percent to 80 percent of the acquiring bank's share of the fee. Inc42 says analysts see a valuation uplift of $300 million to $1 billion, which is up to a fifth of the reported $5 billion. Paytm, by contrast, expects about a 2.5 basis point improvement in its payments margin over two to three quarters.

Agents, Southeast Asia and the profit promise

Razorpay's Agent Studio is built on Anthropic's Claude and sells agents for abandoned carts, disputes, subscription recovery and cash-flow forecasting. Inc42 found little public evidence of agent revenue. Inc42 quotes Mathur saying real monetisation may take a few years.

The profit promise is a better yardstick. Chief Financial Officer Arpit Chug said in October 2025 the India business should be "solidly profitable" by the end of FY26, with consolidated profit two to three quarters later. FY26 numbers are not public.

Razorpay claims more than $180 billion in payment volume as of end-2024 and says about 80 percent of its clients are small businesses and startups. PayU India's FY25 payments revenue of about ₹4,420 crore was ahead of Razorpay's, and Cashfree's was ₹640.1 crore. Southeast Asia is expected to supply 15 percent of revenue by 2030, per Inc42's sources.

Razorpay operates in Malaysia, where it bought Curlec in 2022 and launched a gateway in 2023, and in Singapore, which it entered in March 2025. It is eyeing the Philippines, Thailand and Vietnam. Inc42 says international payments grew about 40 percent, without giving a base, so the growth rate cannot be turned into revenue.

The same piece says the core online payments business is EBITDA profitable and cash-generative, a claim attributed to company sources. That is a statement about one business line, and it sits beside a consolidated loss, which is why the unsized FY25 loss matters more than any single margin figure.

Related coverage on listings and valuation multiples: Moneyview and Amagi's Q2 numbers and Wonder's confidential IPO filing. For Razorpay, the confirming event is the updated draft prospectus, which would carry the FY25 loss, the fresh-issue size and the price band.