Mobikwik files DRHP with SEBI to raise Rs 1900 crore

Mobikwik, a digital payments company, has filed a Draft Red Herring Prospectus with the Securities Exchange Board of India (SEBI) to raise Rs 1,900 crore ($255 million). Earlier it was reported that Mobikwik is preparing to file its DRHP with SEBI.

It will also include an offer for sale of up to Rs 400 crore and a primary issue of Rs 1,500 crore, as per the company filings.

American Express, Bajaj Finance, co-founders Bipin Preet Singh and Upasana Taku, Sequoia Capital, Teeline Asia, and Cisco Systems are among the shareholders who will participate in the OFS.

The Gurgaon-based company has also recently issued bonus shares in the ratio of 3:1 to its existing equity shareholders and allotted 156,17,940 equity shares to its 67 equity shareholders. Its co-founders Singh and Taku reaped the most benefits from the bonus issue, receiving 95.3 percent of the bonus shares.

The DRHP has mentioned that the book running lead managers are ICICI Securities, BNP Paribas, Credit Suisse, IIFL Securities, and Jefferies India Private Limited, and the registrar is Link Intime India Private Limited.

The DRHP further detailed the proposed use of funds raised through the IPO, stating that at least 40% of the net proceeds will be used to fund organic growth initiatives such as customer and merchant acquisition, as well as investments in data sciences research and technology to improve their existing products such as MobiKwik Wallet, BNPL, and Zaakpay.

Aside from that, the proceeds from the IPO will be used to meet regulatory capital requirements and maintain minimum capitalization and net-worth requirements.

MobiKwik’s subsidiary, Zaak ePayments Services Private Limited, has applied to the RBI for a payments aggregator license, and the central bank has mandated that the company sustains a positive net worth of Rs 25 crore by March 31, 2023.

The remainder of the proceeds will be used for corporate growth through strategic acquisitions and general corporate purposes.

Mobikwik was founded nearly a decade ago as a mobile wallet company to offer a variety of financial services such as small-ticket loans and insurance.

The fintech startup joins the group of new-age companies preparing to list on Indian stock exchanges at a time when market indices have risen despite Covid’s impact on the economy

According to the company’s DRHP, its total income for the fiscal year ended March 2021 was down 18 percent to Rs 302 crore, while its losses increased 12 percent to Rs 111 crore.

Mobikwik’s user base has increased to 101 million, and the platform has onboarded over 3 million merchants for both online and offline payments. Its operations have been divided into three categories: buy now, pay later, consumer payments (MobiKwik Wallet), and payment gateway (Zaakpay).

The company’s buy now, pay later offerings, developed in collaboration with third-party applications, are aimed at acquiring customers with average credit profiles to provide low-cost capital and other financial products.

Mobikwik was valued at $700 million in its most recent financing round, which included a $20 million investment from the Abu Dhabi Investment Authority.

MobiKwik is the second payments company to submit a DRHP this year. Paytm, backed by AliPay, is also planning to file a DRHP this week to raise Rs 12,000 crore. Aside from these companies, a slew of Indian startups, including Zomato and CarTrade, set to make their stock market debut.

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