Sequoia-backed MobiKwik files DRHP to raise 1,900 Cr in IPO

Gurugram-based payments firm MobiKwik has filed its Draft Red Herring Prospectus (DRHP) for its IPO. One MobiKwik Systems Limited, which is the parent entity of MobiKwik, will float its initial public offer inviting bids for equity shares worth Rs 1,900 crore.

The offer comprises of fresh issue of equity shares aggregating upto Rs 1,500 crore along with an offer for the sale of shares worth Rs 400 crore by seven existing shareholders of the company namely American Express, Bajaj Finance Limited, Cisco Systems, Sequoia, Tree Line Asia Master Fund and both promoters Bipin Preet Singh and Upasana Taku.

The company had recently issued bonus shares to its existing equity shareholders in the ratio of 3:1 and allotted 156,17,940 equity shares to its 67 equity shareholders. Its co-founders Singh and Taku were the largest beneficiaries of the bonus issue, being allotted 95.3% of the bonus shares.

The DRHP mentions that ICICI Securities, BNP Paribas, Credit Suisse, IIFL Securities and Jefferies India Private Limited have been appointed as the book running lead managers and Link Intime India Private Limited has been notified as the registrar of the offer.

Detailing the proposed utilization of funds to be raised via the IPO, the DRHP states that at least 40% of the net proceeds will be utilised towards funding organic growth initiatives which will include customer and merchant acquisition, and investments in data sciences research and technology to improve their existing products including MobiKwik Wallet, BNPL and Zaakpay.

Further, the funds raised from the IPO will be utilised to fulfil regulatory capital requirements and maintain minimum capitalization and net-worth requirements. 

MobiKwik’s subsidiary Zaak ePayments Services Private Limited has applied for a payments aggregator licence from RBI and the central bank has mandated that the company has to maintain a positive net worth of Rs 25 crore by March 31, 2023. The rest of the proceeds shall be utilized for growth through strategic acquisitions and for general corporate purposes.

MobiKwik is the second payments firm which has filed a DRHP this year. AliPay-backed Paytm is also set to file its DRHP this week to raise Rs 12,000 crore. Besides these companies, a clutch of Indian startups including Zomato and CarTrade are in line to make their debut on the stock market.