Razorpay Has Approval To List A Third Below Its 2021 Price, And Time To Wait

In this storyRazorpay

Razorpay has received approval from the Securities and Exchange Board of India for its proposed initial public offering, according to reports citing sources, bringing the Bengaluru payments company closer to a domestic listing.

Reported estimates of the issue size differ, ranging from ₹5,000 crore to ₹6,500 crore, at a targeted valuation of around $5 billion. The company commanded $7.5 billion in 2021, when it raised $375 million, so the reported target sits roughly a third below that mark. Razorpay has not announced a price band, final issue size or dates.

The offer is expected to combine a fresh issue with an offer for sale by existing shareholders, though the split has not been disclosed. Shareholders approved a fresh issue of up to ₹2,700 crore in May 2026, according to filings with the Registrar of Companies.

Razorpay pre-filed its draft red herring prospectus confidentially on 12 June 2026. Under that route, the issue must open within 18 months of SEBI's observations, against 12 months on the regular route. Reports suggest a listing between January and March 2027. Axis Capital, Kotak Mahindra Capital, JP Morgan and Citi are reported as the bankers.

Founded in 2014 by Harshil Mathur and Shashank Kumar, Razorpay offers payment processing alongside business banking, payroll and lending products. It converted into a public limited company in April 2025 and completed its reverse flip from the United States to India later that year. It will list into a market that already includes Paytm and Pine Labs.

The most valuable thing Razorpay obtained from this approval may be the clock rather than the permission.

Companies that pre-file confidentially get 18 months from SEBI's observations to open an issue, where the regular route allows 12. With observations in early November, that window runs well into 2028. Razorpay can now watch two full years of market conditions and choose its moment, which is a materially different position from a company that filed publicly and must go within a year or start again.

That option is worth more this month than it was last. The Nasdaq 100 had its worst day since March 2020 on 5 November, Indian private funding halved in October, and the three largest Indian technology listings of the past six weeks produced one strong debut and two that fell below their issue prices. An issuer with a deadline prices into that. An issuer with eighteen months does not have to.

It also reframes the $5 billion figure. A target reported at a third below the 2021 round reads as a markdown, and in one sense it is, since the investors from that round would be selling at a loss. But it is a target in a window, not a price in a book. If conditions improve through 2027 the company can revisit it, and if they do not it can wait rather than accept worse.

The judgment to watch is whether it uses that flexibility or spends it. Confidential filers have tended to come to market faster than their windows require, because the longer a company sits with approval in hand, the more the market wonders what it is waiting for.

The structure of the eventual offer is where the useful information will be, and it is not disclosed yet.

Shareholders approved a fresh issue of up to ₹2,700 crore. If the total lands between ₹5,000 crore and ₹6,500 crore, something close to half the offer is existing investors selling. That is a legitimate and expected feature of a company eleven years old with backers who have waited a long cycle, and it is also the number worth watching when the prospectus arrives.

Zetwerk made the case for watching it. Its offer for sale expanded by 49 per cent in the final weeks before pricing, early investors realised about ₹1,215 crore, and the stock broke its issue price inside forty minutes of listing. The relationship between how much insiders choose to sell and how the stock behaves afterwards has been unusually direct in this cycle.

The sector context is less forgiving than the headline suggests. Razorpay will be priced against Paytm and Pine Labs, both already listed and both carrying their own history of valuation compression. A payments business in India also faces a revenue question the private markets never fully priced, which is that UPI, the rails most of its volume runs on, still earns almost nothing per transaction and the merchant discount rate meant to change that has been deferred with no new date.

That is the thing a 2027 prospectus will have to address directly, in a way a 2021 funding round never had to.

For daily, sharp analysis of the biggest moves in the Indian business and startup ecosystem, follow StartupFox.