Aiming to raise 63% lower fund, MobiKwik's IPO presents a refined financial strategy with a focus on fresh shares, unlike the ambitious approach in 2021, signalling a calculated and grounded move
MobiKwik shares in the unlisted market has slipped from INR 1400 in October, 2021 to INR 350 (and now trading at INR 725), reflecting the investors’ traction based on how Paytm performed in the listed market during the time period
The company’s revenue from payments has declined from 79% of the operational revenue in FY21 to 45% in FY23 and is expected to go further down in FY24, marking lack of a well-established USP for the investors
In 2021, the company had set its sights on raising a substantial INR 1,900 Cr (INR 1,500 Cr from fresh shares and INR 400 Cr from OFS), but this has been reduced by 63% to INR 700 Cr in 2024. And unlike the 2021 DRHP, there’s no offer for sale (OFS) from existing shareholders this time. “MobiKwik’s anticipated IPO range of INR 800-INR 900 per share, translating into a valuation of INR 4,500 Cr – INR 5,100 Cr, reflects cautious optimism in the market. Unlike Paytm’s broader product suite, MobiKwik has pivoted significantly towards lending from payments. Lending accounts for over half of its revenue in FY23 and the first six months of FY24,” Paliwal told Inc42.“The lending segment faces challenges in valuation due to the small ticket size of the loans on MobiKwik and the tightening of regulations by the RBI in recent months. Any new regulatory changes could significantly impact MobiKwik’s business model,” said Unlisted Zone’s Paliwal.
In just over two years, MobiKwik’s tack has changed. The Delhi NCR-based fintech unicorn refiled the draft red herring prospectus for an initial public offering in the first week of 2024. Two years after its initial bid to go public in 2021, the company has clearly reevaluated what it can hope to get from the public markets.