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PhonePe Faces ED Summons Amid IPO Plans
2 Feb
Summary
- PhonePe received multiple ED summons for transactions with Winzo Games.
- Company clarifies summons are for third-party vendors, not PhonePe.
- PhonePe is preparing to launch its IPO in the next two to three months.
Digital payments major PhonePe has been drawn into a money laundering investigation involving Winzo Games and other entities. The Enforcement Directorate (ED) issued multiple communications and summons to PhonePe in December 2025, seeking information on transactions with Winzo Games and Tictok Skill Games. PhonePe also received summons between June 2024 and April 2025 related to investigations on merchants Sutrulla Express and Dinero Payment Services.
In its updated draft red herring prospectus (UDRHP) filed with Sebi, PhonePe clarified that these queries pertained to third-party vendors and not the company, its subsidiaries, promoters, or key managerial personnel. PhonePe stated it does not foresee any implications for the company. A spokesperson reiterated that the summons were not for any investigation into PhonePe's internal operations or personnel, emphasizing its limited role as a third-party information provider.
This situation arises as payment intermediaries like PhonePe, Paytm, and Razorpay have been involved in legal proceedings concerning fraudulent merchants, illegal crypto transactions, and betting/gaming applications. The Reserve Bank of India (RBI) tightened KYC norms on September 15, 2025, mandating stringent due diligence. In February 2025, RBI had made observations regarding PhonePe's KYC processes, which the company addressed.
PhonePe is currently gearing up to launch its Initial Public Offering (IPO) within the next two to three months. The company filed its updated DRHP in January 2026, with expectations of raising $1.5 billion and a valuation around $15 billion.
