Prosus Infuses INR 302 Crore into PayU India to Boost Credit Operations

PayU India, a fintech platform owned by Prosus, has secured an investment of INR 302 Cr (approximately $35 Mn) from its parent company to bolster its credit operations.

PayU, established in 2002 by a group that included Nitin Gupta, Shailaz Nag, Jose Velez, Martin Schrimpff, Arjan Bakker, and Grzegorz Brochocki, operates as Prosus’s digital payments and lending division.  Ibibo introduced PayU PG in 2011 to assist websites in integrating ecommerce transactions with online payments.  The entity was separated from Ibibo in 2014 to create PayU India, co-founded by Nitin Gupta and Shailaz Nag.

According to the company’s MCA filings accessed by media, PayU India issued 4.9 crore equity shares to MIH Payments Holdings B.V., which is Prosus’s investment arm and a subsidiary of Naspers, last month.

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A PayU India spokesperson confirmed the development to media, stating, “This fundraise is aimed at fuelling the growth of our credit business, which is projected to break even by September.  It also demonstrates Prosus’ belief in our growth trajectory and our journey toward profitability.

This is particularly noteworthy as it comes months after media reported that Prosus made a rights issue investment of INR 1,013 Cr in PayU.

PayU India operates two lines of business: payments and digital lending.  The digital lending vertical offers unsecured personal loans to consumers and business loans to SMBs, while charging a commission for processing digital payments.  It offers loans through its NBFC, PayU Finance.

According to Prosus’ annual report, PayU India’s total revenue in FY25 rose 21% year-on-year to $669 million from $551 million in FY24.  Its adjusted EBIT (aEBIT) loss, however, increased to $44 million in FY25 from $32 million in FY24.

In the second half of fiscal year 2025, its payments division’s revenue increased by 12% to $498 million, and it achieved breakeven status.

Meanwhile, the revenue of the credit vertical surged by 60-63% to reach $171 million, accompanied by loan disbursements amounting to $1.1 billion in FY25.  At the close of the year, its loan portfolio was valued at $558 million.  Prosus stated that the segment experienced a negative aEBIT margin of 19%, attributed to “higher financial leverage and higher-than-expected losses from the consumer loan book.”

The IPO of PayU India has been planned for several years, but the company has delayed it once again and is currently aiming to enhance its business operations.  Last month, the CFO of Prosus stated that PayU India will concentrate on bolstering its business in the coming 6–12 months, and that an IPO is not currently a priority.

As the payments vertical reached breakeven in the latter half of FY25, PayU India shifted its attention to the credit vertical, aiming for it to achieve breakeven by September of this year.

Prosus discussed the plans for enhancing profitability in the annual report, stating, “As we look ahead to FY26, the upcoming year will be a time of development for PayU based on initiatives launched toward the end of FY25 aimed at improving its profitability profile.”

The company intends to expand its fintech ecosystem across merchants, consumers, and banks in order to reach this goal.

The RBI’s decision to lift the 15-month ban on PayU’s merchant onboarding in April 2024 and grant it approval to operate as a payment aggregator (PA) is anticipated to enhance its growth by increasing transaction volumes and revenue.  In FY25, after the regulatory relief, PayU expanded its merchant base by adding approximately 13,000 new merchants.

Prosus noted that in the credit vertical, PayU has enhanced its underwriting standards and shifted its credit strategy to emphasize partnerships, lending at checkout, and a move toward SMB lending rather than unsecured consumer loans.  In FY25, SMB loans represented 23% of the total loans issued, which amounted to $1.1 billion.

In its annual report, the company stated, “We have adopted enhanced underwriting practices, resulting in improved performance of the new book originated in 2024, highlighting the business’s adaptability and long-term potential.”

PayU India notably competes with various companies such as Razorpay, Pine Labs, Cashfree, Paytm, and BharatPe across its two verticals.