Online Payments Firm MobiKwik Files DRHP For INR 1,900 Cr IPO

SUMMARY

MobiKwik has filed its draft red herring prospectus (DRHP) for an initial public offering (IPO) of upto INR 1,900 Cr with SEBI

The IPO includes new shares worth INR 1,500 Cr and secondary shares worth INR 400 Cr which the existing investors can sell

Forensic audit expert stated that there was no unauthorised access from outside of MobiKwik’s infrastructure or internally to the database server where customer data was stored

Online payments firm MobiKwik has filed its draft red herring prospectus (DRHP) for an initial public offering (IPO) of upto INR 1,900 Cr with SEBI. The IPO includes new shares worth INR 1,500 Cr and secondary shares worth INR 400 Cr which the existing investors can sell.

As per the DRHP filing, an offer of sale (OFS) includes INR 9.9 Cr by American Express, INR 68.9 Cr from Bajaj Finance, INR 11 Cr by Cisco Systems, INR 94 Cr by Sequoia, INR 24 Cr by Treeline Asia, INR 111 Cr from founders (promoters) such as Bipin Preet Singh and INR 78 Cr from Upasana Taku.

The company in its filings further states that the offer includes a reservation of up to equity shares for its employees. ICICI Securities, BNP Paribas, Credit Suisse Securities (India) Private Limited, IIFL Securities, and Jefferies India are the book managers for the Mobikwik IPO. The shares of the company will be listed in both NSE and BSE.

Founded in 2009 by Bipin Preet Singh and Upasana Taku, the Gurugram-based MobiKwik was last valued at $700 Mn after it raised $20 Mn (INR 150 Cr) in June this year from Abu Dhabi Investment Authority (ADIA).

At present, the company has over 120 Mn users with 3 Mn merchants and over 300 billers. The company claims that since 2018 it has pre-approved over 15 Mn users for its digital credit cards.

According to the DRHP filing, the company earned a total income worth INR 302 Cr and a net loss of INR 111 Cr in FY21.

The online payment firm was also mired into controversy after 3.5 Mn data of MobiKwik users were allegedly leaked. As per reports, the alleged data leak included sensitive information such as KYC details, addresses, phone numbers, Aadhaar card data among others were found on the dark web. However, the company had denied any such mishaps and carried out a forensic audit.

In the DRHP, the company said, “The forensic audit expert subsequently reported that based on the analysis of logs/ data provided to them, there was no unauthorised access from outside of our company’s infrastructure or internally to the database server wherein customer data is stored, during the review period. The report however states certain limitations to the processes undertaken, including virtual walk-through of our systems, not analysing employee devices and that the review was based on logs made available by us and certain non-mandatory logs were not available for the audit.”

The company also accepted that in 2010 there was a hack in the company’s servers. The year 2021 is anticipated to become a watershed moment for Indian tech startups as the year is expected to see the highest number of tech startups going public. Zomato will go public on Wednesday (June 14) and is seeking to raise INR 9,375 Cr in the public issue. Digital payment giant Paytm is eyeing to raise INR 16,600 Cr in the initial public offering.