MobiKwik raises more debt financing as IPO gets delayed

13 Oct 2022 , 07:59 AM

MobiKwik has been raising small amounts of funding in tranches as part of its goal of raising $100 million. Additionally, the business updated its ESOP (Employee Stock Ownership Plan).

BlackSoil and the Bengaluru-based Alternative Investment Fund, Karnation, have provided MobiKwik with a total debt of Rs 55 crore since August, according to two different RoC (Registrar of Companies) filings.

The board of MobiKwik has approved a resolution to issue 900 non-convertible debentures (NCD) at an issue price of Rs. 5,00,000 each in two separate tranches of 700 and 200, respectively, to raise Rs. 35 crore and Rs. 10 crores from BlackSoil.

200 NCDs with a face value of Rs 10,00,000 each and a total value of Rs 10 crore were issued by Karnation, a CAT-II Alternative Investment Fund registered with SEBI, in September.

The loan financing comes nearly 14 months after the fintech company’s previous equity round, which took place in June 2021 and was valued at $720-750 million.

Earlier, the company was having trouble locating international institutional investors at the proper price due to the public’s rising mistrust of fintech business models. The fintech company has also been advised not to move forward with its IPO since it might be challenging to find adequate demand from institutional investors–both domestic and foreign–for it.

In October of last year, MobiKwik gained permission from the market regulator to launch an initial public offering (IPO) of Rs 1,900 crore ($255 million). 1,500 crore will be raised through a new issuance, while the remaining 400 crores will be offered for sale by current shareholders. Sequoia Capital India, Bajaj Finance, American Express, Cisco, and the Abu Dhabi Investment Authority are just a few of the 11-year-old startup’s backers.

Following a postponed IPO in November 2021, news emerged in June 2022 that the company was in discussions with investors to fund $100 million to grow its operations. Upasna Taku, a co-founder, had previously told Bloomberg that the company still intended to go public “but at a more suitable time. For the time being, it will use the new funds for acquisitions, hiring, and marketing.

MobiKwik has been delaying its plan to go public since last year due to a lack of investor interest as well as worries following the underwhelming public listing by Paytm and other firms. MobiKwik has been aiming for an IPO valuation between $1.5 billion and $1.7 billion.

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