MobiKwik, one of India’s leading digital payment platforms, has received final approval from the Securities and Exchange Board of India (SEBI) to raise ₹700 crore through an initial public offering (IPO). Founded by Bipin Preet Singh and Upasana Taku, the Gurugram-based company refiled its IPO documents earlier this year and is now poised to enter the public markets.
IPO Structure
The ₹700 crore IPO will consist entirely of a fresh issue of equity shares, with no offer-for-sale (OFS) component. The issue price is set at ₹2 per share. In addition, MobiKwik may, in consultation with the book-running lead managers, explore raising up to ₹140 crore through a pre-IPO placement via private placement, preferential allotment, or rights issue. If this is completed, the fresh issue size will be adjusted accordingly.
Pre-IPO Fundraising and Debt
Ahead of the IPO, MobiKwik strengthened its financial position by raising ₹50 crore in debt from BlackSoil Capital, as reported earlier this year. This fundraising effort will provide additional liquidity as the company prepares for its public offering.
Allocation of IPO Proceeds
The proceeds from the IPO will be allocated to support the company’s expansion and strategic initiatives, including:
- ₹250 crore for scaling its financial services business.
- ₹135 crore to drive growth in its payment services segment.
- ₹135 crore to invest in technology, including artificial intelligence (AI) and machine learning (ML).
- ₹70.28 crore for capital expenditure on its payment devices business.
- The remaining funds will be used for general corporate purposes.
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MobiKwik’s Business Model and Offerings
MobiKwik offers a broad array of payment and financial services for both consumers and businesses. Its key products include Kwik QR (scan and pay), MobiKwik Vibe (Soundbox), MobiKwik EDC (Electronic Data Capture) machines, and Merchant Cash Advance services. Additionally, MobiKwik operates Zaakpay, a B2B payment gateway for e-commerce businesses, which recently secured regulatory approval from the Reserve Bank of India (RBI) to function as a Payment Aggregator (PA).
Financial Performance
MobiKwik has demonstrated strong financial growth in recent years. According to TheKredible, its revenue from operations surged from ₹539 crore in FY23 to ₹875 crore in FY24, a significant increase. After incurring a loss of ₹84 crore in FY23, the company turned profitable in FY24, posting a net profit of ₹14 crore.
Moreover, MobiKwik's Payment Gross Merchandise Value (GMV) has grown at an annual rate of 32.33%, while the GMV for MobiKwik ZIP (disbursements) saw extraordinary growth of 354.86% between FY21 and FY23, underscoring the company’s rapid expansion and strong presence in India’s fintech ecosystem.
Lead Managers for the IPO
SBI Capital Markets and DAM Capital Advisors are serving as the book-running lead managers for MobiKwik’s IPO, with Link Intime India Private Limited acting as the registrar.
Challenges with P2P Lending Platform Xtra
Despite its positive momentum, MobiKwik has faced challenges, particularly with its P2P lending platform, Xtra. Regulatory actions by the RBI on P2P lending platforms have affected Xtra, leading to investor concerns over withdrawals and policy changes. This remains an area of focus for the company as it navigates the evolving regulatory landscape.
MobiKwik’s ₹700 crore IPO represents a significant opportunity for investors seeking to participate in India’s rapidly growing fintech industry. With its innovative payment solutions, expanding user base, and recent profitability, MobiKwik is well-positioned for future growth. As the company continues to scale its operations and enhance its product offerings, the upcoming IPO marks a pivotal moment in its journey within the competitive fintech space.
Investors should closely monitor MobiKwik’s IPO as the company aims to solidify its position as a leading player in India’s digital payment landscape.
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