PhonePe’s RMG revenue drops to Rs 71 crore in H1 FY26 after regulatory ban

IPO-bound fintech major PhonePe reported a sharp decline in revenue from real money gaming (RMG) in the first half of FY26, following the government’s ban on the segment last year.

PhonePe earned Rs 71 crore from real money gaming in H1 FY26, down from Rs 147 crore in the same period last fiscal, according to its updated draft red herring prospectus (DRHP). The company attributed the fall to the implementation of the Promotion and Regulation of Online Gaming Act, 2025, which imposed a ban on 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 in its filing.

The Walmart-backed company had earned Rs 245 crore from real money gaming in FY25, following Rs 234 crore in FY24 and Rs 208 crore in FY23.

Despite the drop in RMG income, PhonePe said there was no material impact on its overall revenue performance in H1 FY26, even as losses narrowed on a full-year basis. Revenue from operations rose to Rs 3,918 crore in H1 FY26, compared to Rs 3,207 crore in the corresponding period last year, representing a 22% increase. For FY25, PhonePe reported revenue of Rs 7,114 crore.

The company’s losses have narrowed significantly over the past three financial years, declining to Rs 1,727 crore in FY25 from Rs 1,996 crore in FY24 and Rs 2,796 crore in FY23. However, losses widened in the first half of FY26 to Rs 1,444 crore, compared to Rs 1,203 crore in H1 FY25.

PhonePe noted that it expects to continue incurring substantial expenses on sales, advertising and marketing to attract and retain users. Advertisement and sales promotion expenses increased to Rs 455 crore in the six months ended September 30, up from Rs 307 crore in the year-ago period, reflecting a xx% rise. These expenses accounted for 7.51% of the company’s total revenue in H1 FY26.

PhonePe’s proposed IPO will be entirely an offer for sale (OFS) of 5.06 crore equity shares by existing shareholders, with no fresh issue component.

Promoter WM Digital Commerce Holdings, owned by Walmart International Holdings Inc, holds a 71.77% stake in the company and will sell 4.59 crore shares through the OFS, representing 9.06% of the total 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 in PhonePe, followed by Headstand with a 5.73% holding.