The Indian financial technology (FinTech) space has seen a substantial rise with the promotion of digital payments in the country. Along with this, people are realising the significance of financial management. It has paved the path for different FinTech applications, which have become an inseparable part of individual finance in recent years.
The aim of becoming a trillion-dollar economy is catalysed by this growing FinTech revolution in the country. Mobile wallets, wealth management apps, digital payment schemes, insuretech, digital credit systems, etc., have become well-known terminologies. The total addressable market of digital products/services is expected to reach 200-250 lakh crores by FY2028.
A well-known Indian fintech company is in the headlines these days – Mobikwik. It has booked a noteworthy profit in FY2024. It received permission from Initial Public Offer in 2021. Investors are intrigued by this news!
Let’s explore the dynamics and recent financial results of Mobikwik.
More on FinTech space: Fintech Innovations and Personal Finance Apps
About Mobikwik
One Mobikwik Systems Limited, widely known as Mobikwik, is a well-known name in the Indian FinTech space. The company was established in 2009. It has a wide base of products in terms of consumer and merchant payments, digital credit, investment products, etc. Being one of the early Indian entrants in the space, it has a competitive edge.
The company operates its business through its four subsidies:
- Zaak E-payments Pvt Ltd
- Mobikwik Finance Pvt Ltd
- Mobikwik Credit Pvt Ltd
- Mobikwik Investment Advisors Pvt Ltd
The founders, Bipin Preet Singh and Upasana Taku, have rich experience in the industry. It has helped the company acquire a significant market in 12 years. Owing to its scale, the customer acquisition cost(CAC) of the company has been as low as ₹20.3 per customer.
Products/Services of Mobikwik
As of September 2023, the company has 14.6 crore customers. The company finds opportunity in the large, underpenetrated population of the country. It aims to address a total market of ₹128-144 thousand crores by FY2028. Its products/services include:
- Payments: Offline merchants, account transfer, bill payment, e-commerce.
- Digital Credit: ZIP, Equated Monthly Instalments (EMIs)
- Investment: Lens (financial management), Xtra (Lending products), mutual funds and digital gold distribution.
Moreover, it has customer-oriented and merchant-oriented specific products like QR codes, soundboxes, etc. Mobikwik plans to expand its business line with services like Buy Now Pay Later (BNPL), Unified Payment Interface (UPI) credit, merchant network monetisation, etc. The company was willing to expand as a payment aggregator. However, its licence application was rejected by the Reserve Bank of India (RBI).
Is Mobikwik IPO coming soon?
Mobikwik has filed its Draft Red-Herring Prospectus (DRHP) with the Securities Exchange Board of India (SEBI). It aims to raise ₹700 crores through the IPO. It will be totally a fresh issue. Its shares would have a face value of ₹2/-. It is raising money for the following objectives:
| For growth in financial service business | ₹250 crores |
| For growth in payment service business | ₹135 crores |
| Data, machine learning, artificial intelligence, and other technological investment | ₹135 crores |
| Capital expenditure in payment device business | ₹70.2 crores |
| Corporate purposes | Rest from issue |
The book-running lead managers for this issue are SBI Capital Markets Ltd and DAM Capital Advisors Ltd. Its registrar is Link Intime India Pvt Ltd.
A confirmed date for this IPO is yet to be released. The market anticipates that a profitable year may provide a potential opportunity for the investors, and due to this, an IPO can hit the market any time soon.
Must read: What Is Initial Public Offer?
Key consolidated financials
| Particulars | FY24 | FY23 | FY22 |
| Revenue from operations | ₹875 crores | ₹539.4 crores | ₹526.5 crores |
| EBITDA* | ₹37.2 crores | (₹55.9 crores) | (₹115.4 crores) |
| Net Profit | ₹14 crores | (₹83.8 crores) | (₹128.1 crores) |
| Net worth | ₹162.58 crores | ₹142.69 crores | ₹216.54 crores |
| Debt to Equity ratio | 1.3 times | 1.3 times | 0.7 times |
| Return on Equity | 8.65% | – | – |
*EBITDA- Earnings before interest, tax, depreciation and amortisation
The company’s sound position is visible in its financial statement. Its EBITDA and Net Profit have turned profitable in FY24. There is nearly 166% growth in its EBITDA. Moreover, due to positive profit figures, the margins have improved. Moreover, the revenue from operations has experienced growth in double-digits in FY24.
Key ratio like return on equity looks positive. The debt-to-equity ratio is also up to a sound level for the company. However, it has increased in the past two years due to procurement of non-current debt FY 2023-24. The operating cash flow for the company is negative, along with the aggregate cash flow.
SWOT analysis
| Strength | Weakness | Opportunities | Threat |
| Position among the leading companies in the market due to its strong products/services portfolio. | The company has a major focus in Tier 2 and 3 cities, which left the gap of untapped rural market for them. | Already received permission for an IPO. So, fundraising can help the company finance its objectives for technological development. | Competitive industry landscape with companies like PhonePe, Paytm, BharatPe, etc. |
| Low customer acquisition cost due to constant innovation in its services and wide range of merchant networks. | Negative operating cash flow in FY24 may hinder its operation space and increase its debt. | The company registered profit in FY24 along with improvement in revenue and key ratios like return on equity. | In this vulnerable era of cyber attacks, data theft and fraud, the company should focus on its mitigation and take firm steps. |
Summary
The profitable financials for the company are an indication of probable future growth. Its merchant and customer base is also strongly spread across the nation. It aims to increase its market share significantly in the upcoming years. However, the company has to deal with prospective challenges in the industry, and in terms of constant technological advancements in the FinTech space.
The leading market status of the company in the FinTech space, along with recent financial growth, will help deliver a positive image for the company among the investors. The IPO date for the company has not been announced yet. However, its positive growth may attract investors for its IPO.
Check this out! Here’s everything you need to know about MobiKwik’s upcoming IPO
