Kathmandu: Nepal’s leading payment system operator, Fonepay Payment Service, is reporting robust business growth as it prepares to issue an initial public offering (IPO) through the book-building method.
In the first six months of the current fiscal year, the company’s revenue rose by 26 percent compared to the same period last year.
Fonepay generated Rs 611 million in revenue during the six months, continuing a strong upward trajectory. Over the past four years, the company’s income has grown at an average annual rate of 61 percent. Revenue climbed from Rs 206 million in 2022 to Rs 442 million in 2023 and Rs 727 million in 2024, reaching Rs 974 million in the last fiscal year.
Founded in 2019, the company operates as a payment system operator (PSO), with interbank transactions serving as its primary revenue driver. It also offers online payment services and in-store merchant payments through QR codes. Interbank transactions account for 91 percent of total revenue, while online and QR-based payments contribute the remaining 7 percent. By early 2026, Fonepay is projected to maintain liquid reserves of around Rs 647 million, with annual operating expenses estimated between Rs 500 million and Rs 550 million.
The company has recently attracted investment from the Khetan Group, a major business conglomerate in Nepal. Nepal Rastra Bank has approved the sale of a 22.37 percent stake held by founding shareholder Asgar Ali and F1 Soft International.
A total of 1.15 million shares were traded for approximately Rs 1.51 billion, valuing the company at around Rs 6.77 billion. The Khetan Group alone acquired nearly a 20 percent stake, marking its expansion into the information technology sector beyond its traditional investments in banking, insurance, and beverages.
Fonepay currently dominates Nepal’s fintech landscape with an estimated market share of around 86 percent. It has onboarded more than 1.7 million merchants and is connected to over 60 banks and financial institutions. At one point in 2024, the company’s market share had reached as high as 97 percent, underscoring its position as a pioneer in Nepal’s digital payments ecosystem.
Transaction volumes have also surged. In fiscal year 2024/25, Fonepay processed 140 million interbank transactions worth Rs 2.834 trillion. QR-based payments accounted for 300 million transactions totalling over Rs 766 billion. The company has recently introduced QR payment services for Indian tourists and enabled payments in Nepal through 18 international digital wallets used by visitors from 13 countries, including China, South Korea, and Thailand.
Fonepay has already demonstrated profitability, distributing a 10.53 percent cash dividend to shareholders from its earnings in fiscal year 2023/24. It was also recognized by the Government of Nepal during the 8th ICT Day as the highest taxpayer in the information and communication technology sector.
With F1 Soft Group holding a 66 percent stake, the company is now moving forward with plans to offer shares to the public through a book-building IPO. Credit rating agency ICRA Nepal has assigned Fonepay an issuer rating of [ICRANP-IR] A-, indicating an adequate degree of safety in meeting financial obligations and a relatively low credit risk profile.
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