Flipkart-owned PhonePe launches wealth management arm

PhonePe, the payments and financial services arm of e-commerce major Flipkart, has launched a wealth management unit, said filings to the Registrar of Companies (RoC).

PhonePe Wealth Services Pvt. Ltd, incorporated on 15 November, has been set-up with an authorised capital of Rs 50 crore and a paid-up capital of Rs 20 crore, the filings said.
Directors of the entity are Terence Lucien, head of mutual funds at PhonePe, and Aniruddha Patwardhan, chief of the engineering vertical at Flipkart’s payments and financial services arm, the filings revealed. However, it is not clear who will head PhonePe Wealth Services.

PhonePe Wealth Services intends to provide personal finance and wealth management services, which include investment planning, real estate planning, tax planning and portfolio management.

It also intends to act as an agent, adviser and distributor of financial products such as deposits, mutual funds, government securities, shares, stocks, bonds, debentures, digital gold, e-gold, exchange traded funds, alternative investment funds, real estate investment trust, pension schemes and retirement schemes.

However, it is not clear whether these services will be launched on a separate platform or will be integrated into the existing PhonePe app. It could also not be ascertained whether the company has formally commenced operations.

E-mail queries to PhonePe did not get a response till the time of publishing this report.

The development comes after Paytm also launched an entity for wealth management services early this year. In January, Paytm launched Paytm Money to build investment and wealth management products for its users. It also appointed Wishberg founder Pravin Jadhav as senior vice-president to head this new arm.

Besides, a few other players have also launched similar services in the financial services and wealth management space in recent times. 

Last month, Freecharge founder Kunal Shah announced the launch of Cred, his new fin-tech venture intended to reward credit card bill payers on time. 

In 2016, media conglomerate BCCL (Bennett, Coleman and Company Pvt. Ltd) forayed into selling financial products and wealth management with the launch of the ET Money app.

PhonePe, which competes with the likes of Paytm and Google Pay, was a rather late entrant into the digital payments segment. However, it seems to have picked up traction in a short period of time and is currently perceived as one of the most-used platforms in the UPI-based payments space. UPI is Unified Payments Interface.

In August, it claimed to have overtaken rivals Paytm and Google's Tez to emerge as the leader in UPI transactions.

For 2017-18, PhonePe registered a 14-fold rise in revenues and incurred significant cash burn in its efforts to capture a larger user base. The firm’s operating revenues grew to Rs 42.79 crore, up from Rs 3.02 crore the previous year. Gross expenses rose nearly six-fold to Rs 840 crore, up from Rs 146.34 crore for the year prior.

For 2017-18, the company spent heavily on marketing and promotion, which amounted to Rs 602.28 crore, accounting for nearly 72% of the total expenditure. This was followed by employee expenses, which came to around Rs 130.12 crore. Put together, these two categories alone accounted for nearly 88% of PhonePe’s total expenditure incurred.