Fintech Unicorn Mobikwik Refiles IPO Draft for Rs 700 Crore

8 Jan 2024 , 09:43 AM

Mobikwik Systems Ltd, the parent company of fintech unicorn Mobikwik, has submitted a revised draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) for its upcoming initial public offering (IPO) with a fundraising target of Rs 700 crore.

This marks the Gurugram-based fintech firm’s second attempt to go public, having previously deferred its listing plans due to unfavorable market conditions. The IPO, consisting solely of a fresh issue of equity shares with a face value of Rs 2, will not include any offer for sale component.

The issuance will follow the book-building process, with a minimum of 75% of the IPO earmarked for allocation on a proportionate basis to qualified institutional buyers. Non-institutional investors will have access to approximately 15% of the offering, while the remaining 10% is reserved for retail individual bidders.

Mobikwik is contemplating a further issue of specified securities, including private placement, preferential allotment, rights issue, or other methods, totaling Rs 140 crore as Pre-IPO placement. If this placement materializes, the fresh issue size will be adjusted accordingly.

The intended use of proceeds from the fresh issue is as follows: Rs 250 crore for fueling growth in the financial services business, Rs 135 crore for expanding payment services, Rs 135 crore for investments in data, machine learning, artificial intelligence, and product and technology, Rs 70.28 crore for capital expenditure in the payment devices business, and the remaining for general corporate purposes.

Founded in 2009, Mobikwik stands as one of India’s leading mobile wallets and buy now, pay later service providers, boasting over 101 million registered users and partnerships with more than 3 million e-commerce, retail, and biller entities. Notable backers include Abu Dhabi Investment Authority, American Express Co., and Peak XV.

Although the company achieved profitability towards the end of 2021, it postponed its IPO plans amid a broader decline in technology company shares, exemplified by its larger rival Paytm, which went public in November 2021.

For the fiscal year 2022–23, Mobikwik reported a revenue increase to Rs 539.47 crore from Rs 526.56 crore in the previous fiscal year. The loss for the same period decreased by 34.60%, from Rs 128.16 crore to Rs 83.81 crore.

The fintech firm, led by the husband-wife duo Bipin Singh and Upasana Taku, extends credit under the Zip franchise and offers personal loans and pay-later options to salaried professionals. It claims a user base of 146.94 million, with approximately 35 million being active users.

DAM Capital Advisors and SBI Capital Markets are serving as the book-running lead managers for the IPO, with Link Intime India Private Ltd acting as the registrar. The equity shares are proposed to be listed on both the BSE and NSE.

Mobikwik joins the ranks of Indian startups pursuing public offerings in the current year, alongside Ola Electric and FirstCry, both of which filed their draft prospectuses for IPOs in the preceding month.