MobiKwik refiles DRHP with SEBI to raise Rs 700 crore via IPO; Here's all you need to know

Gurugram-based fintech startup MobiKwik has refiled its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO). 

According to DRHP, the company aims to raise Rs 700 crore through this offering, marking its second attempt at launching an IPO. The first attempt, a Rs 1,900 crore IPO made in July 2021, which notably received SEBI's approval. However, the company deferred its plans as market conditions worsened.

IPO structure and size

While the DRHP has been filed with SEBI by the company, the Mobikwik IPO price band, lot size and dates have not been finalised yet. These details will be shared once the RHP for the IPO is approved and made public.

The IPO will consist entirely of a fresh issue of shares, with no Offer for Sale (OFS) component. The shares, with a face value of Rs 2 each, will be allocated with 75% reserved for qualified institutional buyers, 15% for Non-Institutional investors, and a maximum of 10% for retail individual investors. 

MobiKwik also plans a pre-IPO placement of shares worth around Rs 140 crore. The size of the fresh issue will be smaller if such placement is successful.

What it plans to do with the IPO proceeds

MobiKwik intends to utilize the funds raised for various growth initiatives. Approximately Rs 250 crore is earmarked for expanding the financial services business, Rs 135 crore each for growing the payment services and investing in data, AI, and other technologies, and over Rs 70.28 crore for capital expenditure in the payment devices sector and general corporate purposes. 

Is MobiKwik profitable?

MobiKwik, founded by Bipin Singh and Upasana Taku, has evolved from a mobile wallet provider to offer a range of financial services, including digital payments, credit, and insurance products. The platform boasts over 146 million registered users and 3.8 million merchant partners.

Despite being unprofitable in the fiscal years 2021, 2022, and 2023, MobiKwik turned profitable in the six months ending September 30, 2023, with a profit of $1.1 million (Rs 9.48 crore) on revenue of $29.3 million (Rs 381.09 crore). 

The company's revenue from operations for the fiscal year 2022–2023 increased to Rs 539.47 crore from Rs 526.56 crore in the previous fiscal year. The loss for the year dropped by 34.60% from Rs 128.16 crore in the fiscal year 2022 to Rs 83.81 crore in the fiscal year 2023.

“In particular, we have experienced rapid growth in our financial services business, with our digital credit GMV (gross merchandise value) increasing at a rate of 404.16% from ₹2,999.43 million in fiscal 2021 to ₹15,122.16 million in fiscal 2022 and at a rate of 238.24% from ₹15,122.16 million in fiscal 2022 to ₹51,149.83 million in fiscal 2023. Our digital credit GMV was ₹41,163.40 million in the six months ended September 30, 2023," the draft filings said.

Who are the shareholders?

In the financial landscape of MobiKwik, a diverse array of shareholders play a pivotal role. Bipin Preet Singh, a major promoter of the company, holds a significant 19.26% stake. Bajaj Finance Limited has a substantial shareholding of 13.44%. Upasana Rupkrishan Taku, who co-founded MobiKwik, owns 13.09% of the company. Close behind is Peak XV Partners Investments IV, holding a 13.06% stake.

Net1 Applied Technologies Netherlands B.V. is another notable shareholder with a 10.47% stake. Tree Line Asia Master Fund (Singapore) Pte Ltd holds a 3.89% stake, while Sequoia Capital India Investment Holdings III owns 3.68%. The Abu Dhabi Investment Authority holds a 2.80% stake.

Further adding to the diverse shareholder mix are Bennett, Coleman and Company Limited, with a 2.54% stake and Cisco Systems (USA) Pte. Ltd., which holds 2.02%. American Express Travel Related Services Company, Inc., known for its global financial services, maintains a 1.76% stake.

Lastly, Hindustan Media Ventures Limited and GMO Global Payment Fund Investment Partnership hold 1.21% and 1.07% stake, respectively. 

The book-running lead managers

The book-running lead managers (BRLM) for the IPO are SBI Capital Markets Limited and DAM Capital Advisors Limited, while Link Intime India Private Limited serves as the offer registrar. The equity shares will be listed on the BSE and NSE.

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