Nepal’s leading industrial conglomerate, Khetan Group, has made a strategic entry into the country’s booming fintech sector by acquiring a 14% stake in digital payment company FonePay. The investment, led by industrialist Rajendra Khetan, is part of a larger transaction where 10 investors purchased a combined 22.37% stake in FonePayfor approximately NPR 1.49 billion (USD 11.2 million).
The Nepal Rastra Bank (NRB) approved Khetan’s individual acquisition of 14%, alongside other institutional investors including Rapid Investment, Nepal Impact Fund One, Nepal Infrastructure Fund, Sweda Investment, and Laxmi Micro Invest Pvt. Ltd.
“The proposal for restructuring FonePay’s shareholding under F1Soft has been approved, and the formal process will follow,” an NRB official confirmed.
Major Transaction in Nepal’s Digital Payment Landscape
The stake was acquired from F1Soft International and technology expert Asgar Ali, who together sold 22.37% shares. Following this deal, FonePay‘s valuation has reached NPR 6.67 billion (USD 50 million).
FonePay, licensed by NRB on February 8, 2020 (Magh 26, 2076 BS), has a paid-up capital of NPR 505 million. It currently dominates Nepal’s QR-based payment ecosystem, accounting for 92–94% of QR transactions, with a daily transaction volume exceeding NPR 18 billion.
Khetan Group’s Financial Focus
Khetan Group has been reshaping its portfolio, moving away from manufacturing (notably selling its stake in Gorkha Brewery and Carlsberg India for NPR 100 billion) and focusing on finance and digital services. Recently, Rajendra Khetan also acquired 5.21% promoter shares in Laxmi Bank for NPR 1.26 billion, increasing his stake to 7.5%.
“Digital banking is the future. Our goal is to expand financial access to underserved communities using modern banking platforms,” Khetan said.
Strategic Vision for FonePay
According to Khetan, the investment aligns with Nepal’s growing demand for digital banking and aims to extend financial services to lower-income groups via mobile apps. FonePay currently partners with 19 commercial banks, 14 development banks, 14 finance companies, 9 digital wallets, and 1 microfinance institution.
F1Soft, FonePay’s parent company, is also expanding into Phone Loan, Phone Points, and micro-investment services, using proceeds from the share sale to fund these verticals. The company plans to go public through an IPO in the near future, as required by its registration as a public company since 2018.
Previous Attempts and Foreign Interest
This is not the first attempt to bring external investment into FonePay. In 2020, F1Soft signed an agreement with Dolma Impact Fund to sell a 20% stake at a valuation of NPR 2 billion. However, NRB blocked the deal to prioritize domestic investors. International Finance Corporation (IFC) also expressed interest but withdrew following regulatory restrictions that limit foreign ownership in payment companies to a maximum of 15%.
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