IPO-Bound MobiKwik Turns Profitable In H1 FY24, Posts INR 9.4 Cr PAT

SUMMARY

MobiKwik had incurred a net loss of INR 83.8 Cr in FY23 and INR 128.1 Cr in FY22

MobiKwik’s operating revenue in the first six months of FY24 stood at INR 381 Cr

The startup aims to raise INR 700 Cr via fresh issue of shares. No offer-for-sale component is involved in the public issue

IPO-bound fintech unicorn MobiKwik turned profitable in the first six months of the ongoing financial year. As per the startup’s draft red herring prospectus (DRHP), it posted a profit after tax (PAT) of INR 9.4 Cr in the six-month period ending September 30, 2023.

MobiKwik had reported a net loss of INR 83.8 Cr in FY23 and INR 128.1 Cr in FY22.

Operating revenue stood at INR 381 Cr in H1 FY24. This was almost 70% of its FY23 revenue. The startup’s revenue from operations stood at INR 539.4 Cr in FY23, marginally higher from INR 526.5 Cr in FY22.

The fintech unicorn generates revenue by providing consumer payments, buy now pay later (BNPL), and payment gateway services. The startup has also launched a sound box product, Vibe, to take on Paytm and PhonePe.

Where Did MobiKwik Spend?

MobiKwik’s total expenditure stood at INR 366.8 Cr in H1 FY24. For context, its expenditure in FY23 stood at INR 617 Cr, a decline of 6.3% from INR 658.6 Cr in FY22.

Lending Operational Expenses: This was the biggest expenditure for MobiKwik in H1 FY24. Lending operational expenses is primarily the expense incurred by the startup towards payment of certain charges to banks and NBFCs, including facilitation fees and technology fees, for disbursing loans under MobiKwik ZIP and ZIP EMI.

Lending operational expenses stood at INR 102.6 Cr in H1 FY24, almost one-third of the total expenditure. In FY23, it spent INR 68.5 Cr under this bucket.

It must be noted that MobiKwik intends to utilise INR 250 Cr from the net proceeds of the IPO towards capital adequacy for providing default loss guarantees to its lending partners and meeting operational expenses pertaining to its financial services business.

Payment Gateway Cost: In the first six months of FY24, the startup spent INR 83.5 Cr on payment gateway charges. This number stood at INR 156.6 Cr in FY23, 31% lower than INR 227.6 Cr in FY22.

Employee Benefit Expenses: Employee costs stood at INR 51.6 Cr in H1 FY24. MobiKwik spent INR 98.2 Cr on employee benefit expenses in FY23 against INR 107.2 Cr in FY22.

The Delhi NCR-based startup aims to raise INR 700 Cr via fresh issue of shares. No offer-for-sale (OFS) component is involved in its public issue.

This is MobiKwik’s second attempt to go public. It first filed its DRHP with SEBI in 2021 to raise INR 1,900 Cr via a combination of fresh issue and OFS. However, it shelved its IPO plans, despite getting approval from SEBI, due to volatile market conditions.