MobiKwik aims for ₹700 Crore in IPO revival

Indian fintech giant MobiKwik has once again set its sights on the public market, filing a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise approximately ₹700 crore (around $94 million) through an initial public offering (IPO). This move comes as MobiKwik aims to capitalise on the renewed confidence in the IPO market, having previously shelved its plans due to challenging market conditions in 2021.

This marks MobiKwik’s second attempt at going public. In July 2021, the Gurugram-based startup initially sought to raise a substantial $250 million through the sale of new and existing shares. However, unfavourable market conditions compelled MobiKwik to withdraw its plans at that time.

Founded 15 years ago by the husband-wife duo Bipin Singh and Upasana Taku, MobiKwik has evolved from its origins as a mobile wallet provider to a comprehensive online financial services platform. Backed by prominent investors such as Peak XV, Abu Dhabi Investment Authority, and American Express, the company now operates across various financial verticals, including digital payments, credit, investment, and insurance products.

The recent filing reveals that MobiKwik is eyeing a fresh pre-IPO round to raise around $16 million. The IPO itself consists entirely of a fresh issue of equity shares, with no offer for sale component. SBI Capital and DAM Capital are leading the IPO process.

MobiKwik’s financial performance reflects resilience and adaptability. The company, which faced losses in the financial years 2021, 2022, and 2023, turned profitable in the six months ending September 30, 2023. During this period, it reported a profit of $1.1 million on revenue of $29.3 million, according to the prospectus.

The DRHP outlines the allocation of funds from the IPO proceeds. Of the total Rs. 700 crore, Rs. 250 crore is earmarked for funding growth in the financial services business, Rs. 135 crore each for the payment services business and investments in data, machine learning, artificial intelligence, and technology. Additionally, about Rs. 70.28 crore will be directed towards capital expenditure for the payment devices business, with the remaining sum allocated for general corporate purposes.

As of September 30, 2023, MobiKwik boasts an impressive market presence with 146.94 million registered users and 3.81 million merchant partners. The company’s expansion beyond traditional wallet services into diverse financial products, including “buy-now-pay-later” credit, personal loans, wealth management, and insurance distribution, has contributed to its success.

The IPO details, including the price band, lot size, and specific dates, are yet to be finalised and will be disclosed in the Red Herring Prospectus (RHP) post-SEBI approval. The equity shares are proposed to be listed on the BSE and NSE, providing investors with an opportunity to participate in MobiKwik’s growth story.