Gurugram-based fintech unicorn Mobikwik, has refiled its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise Rs 700 crore through its initial public offering (IPO).
Earlier in July 2021, the company had filed the draft red-herring prospectus with Sebi for a Rs 1,900-crore IPO.
The issue will be a pure fresh issue. The company, with advice from lead managers, may issue securities worth Rs 140 crore through pre-IPO placement, potentially reducing the fresh issue size.
Out of the Rs 250 crore raised, Rs 135 crore will fuel financial services growth, Rs 135 crore will support data and technology investment, Rs 70.28 crore will fund payment devices’ capital expenditure, and the rest will cover general corporate needs.
Co-founded by Bipin Preet Singh and Upasana Taku, leveraging their expertise in scalable technology and finance, the company aims to bolster financial inclusion in India using technology. Offering extensive payment solutions like online checkout, Kwik QR scan, MobiKwik Vibe, EDC Machine, and Merchant Cash Advance to businesses and merchants.
The issue is being made through the book-building process, wherein not less than 75% of the IPO will be available for allocation on a proportionate basis to qualified institutional buyers. Meanwhile, about 15% of the offer will be available for allocation to non-institutional investors, and the rest 10% for retail individual bidders.
The company, in consultation with the book-running lead managers, may consider a further issue of specified securities including private placement, preferential allotment, rights issue, or any other method aggregating to ₹140 crore as Pre-IPO placement. If such placement is completed, the fresh issue size will be reduced.
The proceeds from the fresh issue, to the extent of Rs 250 crore, will be used for funding growth in the financial services business, Rs 135 crore for funding growth in the payment services business, Rs 135 crore for investment in data, ML and AI and product and technology, Rs 70.28 crore for capital expenditure for the payment devices business, and general corporate purposes.
Founded in 2009, Mobikwik is one of the largest mobile wallets and buy now, pay later service providers in India, according to its website. It has more than 101 million registered users and over 3 million e-commerce, retail and biller partners. Abu Dhabi Investment Authority, American Express Co. and Peak XV are among its backers.
The company turned profitable toward the end of 2021 but deferred its IPO plans following a rout in technology company shares including that of its larger rival Paytm, which went public in November 2021.
For financial year 2022–23, the company’s revenue from operations has increased to Rs 539.47 crore, compared to Rs 526.56 crore for fiscal 2021–22. Loss for the year decreased by 34.60% from Rs 128.16 crore in fiscal 2022 to Rs 83.81 crore in fiscal 2023.
The fintech firm offers users credit under the Zip franchise and provides personal loans as well as a pay-later option to salaried professionals.
Mobikwik claims to have a base of 146.94 million users, with a quarter of them (roughly 35 million) being active.
DAM Capital Advisors, SBI Capital Markets are the book-running lead managers to the issue, while Link Intime India Private Ltd is the registrar.
The equity shares of the company are proposed to be listed on both the stock exchanges, the BSE and the NSE.
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