Fonepay revenue jumps 26%, IPO via book building process on the way

KATHMANDU: Nepal’s leading digital payment network operator Fonepay Payment Service Limited has reported a 26 percent growth in revenue in the first six months of the current fiscal year, as the company moves closer to issuing an Initial Public Offering (IPO) through the book building method.

According to company data, Fonepay generated Rs 61.10 crore (Rs 611 million) in revenue during the review period, marking strong year-on-year growth. The company’s revenue trajectory has remained sharply upward over the past four years, with an average annual growth rate of 61 percent.

Fonepay’s earnings have expanded significantly—from Rs 20.60 crore in 2022 to Rs 44.20 crore in 2023, Rs 72.70 crore in 2024, and Rs 97.40 crore in the last fiscal year, underscoring rapid scaling in Nepal’s fintech ecosystem.

Established in 2019, the company operates as a Payment System Operator (PSO), with its primary revenue source coming from interbank transactions, which contribute 91 percent of total income. The remaining 7 percent is derived from online payment services and in-store merchant QR-based transactions.

Fonepay currently commands a dominant position in Nepal’s digital payments space, holding an estimated 86 percent market share, with over 1.7 million merchants and integration across more than 60 banks and financial institutions.

In terms of transaction volume, the company processed 14 crore interbank transactions worth Rs 28.34 trillion in fiscal year 2081/82. Additionally, QR-based payments recorded 30 crore transactions, exceeding Rs 7.66 trillion in value, reflecting a rapid shift toward cashless transactions in Nepal.

The company has also expanded cross-border payment capabilities, enabling Indian tourists to make QR payments, while supporting transactions from 18 international wallets across 13 countries, including China, South Korea, and Thailand.

On the financial front, Fonepay is projected to maintain liquid reserves of around Rs 64.70 crore, with annual operating expenses estimated between Rs 50–55 crore.

A major recent development includes the entry of the Khetan Group, which has acquired around 20 percent ownership in Fonepay. The acquisition follows approval from the Nepal Rastra Bank to allow the sale of 22.37 percent promoter shares held by Asgar Ali and F1Soft International.

A total of 1.152 million shares were traded at a transaction value of approximately Rs 1.51 billion, valuing the company at around Rs 6.77 billion.

Fonepay, which is majority-owned (66 percent) by F1Soft Group, has demonstrated strong profitability, distributing a 10.53 percent cash dividend to shareholders from its FY 2080/81 earnings. The company was also recognized by the Government of Nepal during the 8th ICT Day as the highest taxpayer in the information and communication technology sector.

Looking ahead, Fonepay is preparing to issue shares to the public through the book building process, targeting institutional and qualified investors before opening to the general public.

Credit rating agency ICRA Nepal has assigned the company an ‘[ICRANP-IR] A-’ issuer rating, indicating adequate safety in meeting financial obligations and a relatively low credit risk profile.