MobiKwik DRHP: To raise Rs 700 Cr via IPO; churns profit in H1 FY24

Fintech firm MobiKwik has filed a draft red herring prospectus (DRHP) with the market regulator SEBI to raise Rs 700 crore from its initial public offering.

MobiKwik said it may consider a further issue of specified securities including private placement, preferential allotment, rights issue, or any other method aggregating to Rs 140 crore as ‘pre-IPO placement’. If such placement is completed, the fresh issue size will be reduced.

This is the second attempt by MobiKwik to go for an IPO. It filed a DRHP in July 2021 but later abandoned public listing citing weak market conditions. It’s worth highlighting that the company is looking to raise less than half of what it aimed at from the previous attempt to go public.

MobiKwik planned to mop up Rs 1,900 crore in the public listing which consisted of Rs 1,400 crore fresh issue and Rs 500 crore worth offer of sale. It appears that the good performance of firms like Zomato, MamaEarth, Paytm and Nykaa has bolstered MobiKwik’s confidence.

According to the company’s latest DRHP, it will use Rs 250 crore from the proceeds of the IPO towards financial service business. It has earmarked Rs 135 crore for funding growth of its payment service business. It also plans to deploy Rs 135 crore for the investment in data, ML and AI and product and technology. Rest of the capital will be used for capital expenditure for the payment devices business, and general corporate purposes. 

As of the date of DRHP, Bipin Preet Singh is the largest stakeholder in the company with 19.26% stake while Upasana Taku holds 13.09% shares. Further, Bajaj Finance, Peak XV Partners and Net1 Applied Technologies have 13.44%, 16.73% and 10.47% shares, respectively.

The company also turned profitable in H1 of FY24 with Rs 9.5 crore profits along with an operating revenue of Rs 381 crore. In FY23, its operating revenue, however, went up just 2.37% to Rs 539 crore as compared to Rs 526.5 crore in FY22. MobikWik booked a loss of Rs 83.8 crore in FY23 which shrank 34% against Rs 128 crore loss in FY22.

While MobiKwik’s last primary valuation stood at around $736 million when it raised the above round, the company’s valuation touched $1 billion in a secondary round (ESOP sale) in October 2021.