MobiKwik IPO: Net Proceeds To Be Used For Business Expansion, AI & ML Investments

Fintech unicorn MobiKwik refiled its draft red herring prospectus (DRHP) with the markets regulator SEBI for an INR 700 Cr IPO this week. The startup plans to use the proceeds from the initial public offering for business expansion, to make investments in AI and ML, among others. 

MobiKwik said in its DRHP it will use INR 250 Cr towards funding growth in the financial services business where it distributes loans from its lending partners to the users through MobiKwik ZIP and ZIP EMI.

On the other hand, INR 135 Cr would be used for funding growth in the payment services business.

The startup also plans to use INR 135 Cr of the net proceeds for investment in data, AI and ML, and product and technology. INR 70.28 Cr would be used as capital expenditure for the payment devices business. The remaining amount (not exceeding 25% of the gross proceeds) will be utilised for general corporate purposes.

MobiKwik plans to deploy the net proceeds in these buckets over three fiscal years – FY25, FY26, and FY27.

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. It caters to businesses and merchants with payments and financial services such as online checkout, Kwik QR scan and pay, MobiKwik Vibe (Soundbox), MobiKwik EDC Machine, and Merchant Cash Advance. 

Besides, it operates a B2B payment gateway for ecommerce businesses through its subsidiary Zaakpay and has received the RBI’s approval for its payment aggregator (PA) business.

MobiKwik’s IPO only includes fresh issue of shares worth INR 700 Cr and does not have an offer-for-sale (OFS) component. SBI Capital Markets Limited and DAM Capital Advisors Limited are the lead book runners for the IPO.

It must be noted that the fintech unicorn first filed its DRHP with SEBI in 2021, which comprised fresh issue of shares of up to INR 1,500 Cr and an OFS component of up to INR 400 Cr. However, MobiKwik did not proceed with its IPO plans citing volatile market conditions.

In FY23, MobiKwik’s revenue from operations stood at INR 539.47 Cr against INR 526.56 Cr in the previous fiscal. Its loss narrowed 34.6% year-on-year to INR 83.81 Cr in FY23.

However, the company managed to report a profit in the first six months of FY24. Its profit after tax stood at INR 9.48 Cr in the six-month period ended September 30, 2023.