Exclusive: IPO-Bound MobiKwik To Raise Up To INR 880 Cr Via Fresh Issue

Fintech unicorn MobiKwik is aiming to raise up to INR 880 Cr via a fresh issue of shares in its upcoming initial public offering (IPO). 

The Delhi NCR-based startup’s board recently passed a resolution to raise INR 880 Cr via fresh issue of shares.

Interestingly, as per the resolution, the public issue will not comprise an offer-for-sale (OFS) component. “… ​​Accordingly, no offer for sale of equity shares by existing shareholders is contemplated in the offer,” the resolution read. 

Inc42 has reviewed the resolution.

The startup’s shareholders will now have to pass the resolution for the IPO offer. MobiKwik will likely file its draft red herring prospectus (DRHP) with the markets regulator Securities and Exchange Board of India (SEBI) following this approval.

The IPO offer will also include an pre-IPO placement aggregating up to INR 176 Cr to certain investors prior to it filing the red herring prospectus (RHP) with SEBI. 

It must be noted that the startup has almost halved its IPO size compared to its DRHP, which it filed in July 2021. At the time, MobiKwik was looking to raise INR 1,900 Cr through the issue.

As per the draft documents, the IPO was to comprise of a fresh issue of up to INR 1,500 Cr and an OFS component of up to INR 400 Cr. Existing investors American Express, Bajaj Finance, Peak XV Partners, along with founders (promoters) Bipin Preet Singh and Upasana Taku, were to participate in the OFS.

However, the startup shelved its IPO plans even after getting SEBI’s approval, citing the downturn in the global equities market. In January 2022, it said it would not make a market debut before the markets stabilise.

Meanwhile, MobiKwik has managed to improve its financial health since then. In FY23, the startup’s net loss fell 35% to INR 83.8 Cr from INR 128.1 Cr in FY22. 

Total expenses fell 5% to INR 617 Cr in FY23 from INR 652.5 Cr in FY22. Payment gateway charges, the biggest contributor to total expenses, plunged 31% to INR 156.6 Cr from INR 227.6 Cr in the previous fiscal year.

While the startup’s loss reduced, its revenue remained almost flat in FY23. Operating revenue stood at INR 539.4 Cr during the year under review, a marginal uptick from INR 526.5 Cr in the previous fiscal year. 

MobiKwik also claimed that it was profitable for two consecutive quarters in Q1 and Q2 FY24. It said its profit after tax (PAT) stood at INR 5 Cr in Q2 FY24.

The fintech startup claimed its revenue rose 58% year-on-year (YoY) to INR 358 Cr in the first half of FY24 (H1 FY24) and PAT for the period stood at INR 8 Cr. 

Founded in 2009 by Bipin Preet Singh and Upasana Taku, MobiKwik is a digital banking platform that offers a suite of financial products for both consumers and merchants. Its offerings include digital wallet, buy now pay later services, payment gateway, among others. 

The startup joined the unicorn club in October 2021 after a few of its employees exercised employee stock option plans (ESOPs). The secondary round was led by former Blackstone India head Mathew Cyriac.

MobiKwik has raised over $170 Mn in funding till date.

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