PhonePe discloses ED inquiry into Winzo transactions in updated DRHP

IPO-bound fintech firm PhonePe has disclosed that it has been drawn into an ongoing Enforcement Directorate (ED) investigation linked to online gaming platform Winzo Games, according to its updated draft red herring prospectus (DRHP).

In its regulatory filing, the Walmart-backed company said the ED contacted PhonePe officials on three occasions in December 2025, seeking details related to transactions and settlements with Winzo Games Private Limited. The communications were issued as part of a probe being conducted under the Prevention of Money Laundering Act (PMLA).

“In relation to an ongoing investigation being conducted by the Assistant Director, Directorate of Enforcement, Government of India, Bengaluru against Winzo Games Private Limited under the PMLA, letters dated December 1, 2025 and communications dated December 28 and December 29, 2025 were issued to our Company under Section 54(f) of the PMLA,” PhonePe said in its DRHP.

The ED sought information and documents relating to transactions and settlements conducted via the PhonePe platform with Winzo Games and Tictok Skill Games Private Limited. PhonePe said it has submitted its replies along with all requisite documentation and clarified that its role is limited to assisting the agency by sharing transaction data.

The company also stated that Winzo and Tictok entities are not directly or indirectly connected to PhonePe, its subsidiaries, promoters or key managerial personnel. “The status of our Company in the matter is to assist the ED in the Winzo ED investigation and sharing of transaction data,” the filing said, adding that the matter remains pending.

Separately, PhonePe reported a sharp decline in revenue from real money gaming (RMG) following the government’s ban on the segment last year. Revenue from RMG fell to Rs 71 crore in the first half of FY26, compared with Rs 147 crore in the same period last year.

The company attributed the drop to the implementation of the Promotion and Regulation of Online Gaming Act, 2025, which banned real money gaming with effect from August 22, 2025. “We ceased to generate revenues from advertising and payment gateway services associated with real money gaming with effect from August 22, 2025,” PhonePe said.

PhonePe had earned Rs 245 crore from real money gaming in FY25, following Rs 234 crore in FY24 and Rs 208 crore in FY23.

The proposed initial public offering will be entirely an offer for sale (OFS) of 5.06 crore equity shares, with no fresh issue component. Promoter WM Digital Commerce Holdings, owned by Walmart International Holdings Inc, holds a 71.77% stake in PhonePe and will sell 4.59 crore shares, representing 9.06% of the company’s paid-up equity.

The remaining 47.17 lakh shares will be sold by Tiger Global PIP 9-1 and Microsoft Global Finance Unlimited Company, an Irish subsidiary of Microsoft Corporation. Among public shareholders, General Atlantic Singapore PPIL holds an 8.98% stake, followed by Headstand with 5.73%.