Have you seen instances where companies announce IPOs and withdraw them before the actual date? Well, there are many examples of companies stalling IPOs for various reasons – while sometimes, it is because of an unfavourable market, a few other times, it is because of matters internal to the company.
A similar event happened at MobiKwik, where they withdrew their previous public issue. But they are all set to start fresh and go public again. Today’s article discusses all the details about MobiKwik’s IPO.
Who is MobiKwik?
Founded in 2009 by Bipin Preet Singh and Upasana Taku, MobiKwik is a company operating in the fintech industry, headquartered in Gurgaon, Haryana. MobiKwik is a payment service provider that allows mobile-based financial transactions.
History
The idea began when MobiKwik’s founder, Mr Bipin, realised the potential to enhance options in the mobile recharge space. MobiKwik was established in that direction as a website providing closed wallet facilities. Soon, MobiKwik became available on mobile applications and also initiated tie-ups with e-commerce websites to include MobiKwik wallets in their payment options.
Also read: The best banks in India: Leading the way in finance
Objective
“To transform the digital payment landscape in India.”
MobiKwik today
Today, MobiKwik is a digital wallet used by millions of users across the country. Through its app, MobiKwik provides various financial services like loans, insurance, money transfers, utility bill payments, credit card payments, mobile recharge, DTH, internet recharge, etc. It also offers wealth management, mutual funds and digital gold services to registered users. Besides, MobiKwik allows e-commerce shopping on its application, too.
As of 31 March 2023, MobiKwik had 140 million registered users and a network of 3.7 million merchants. MobiKwik’s investors include Bajaj Finserv, Peak XV Partners and other large institutional players.
MobiKwik’s financials
| Particulars | Amount for the year ended 31 March 2023 (₹ million) |
| Revenue from operations | 5,394.67 |
| Expenses | 6,170.36 |
| EBITDA | (559.20) |
| Loss for the year | (838.14) |
| Earnings per share | ₹(14.66) per share |
MobiKwik’s previous IPO
MobiKwik planned to launch its IPO in November 2021. The company had also filed its prospectus with the Securities and Exchange Board of India to raise ₹1,900 crores through fresh issues and offers for sale. The plan was to utilise the money in the firm’s growth initiatives.
However, the company did not go public as planned due to the pessimistic sentiments of investors.
MobiKwik’s new IPO details
The company is back with the plan to re-launch its Initial Public Offering. MobiKwik’s share price is not announced yet, but the firm has filed its fresh prospectus with SEBI in the first week of 2024 to issue its shares to the public in 2024. The company is planning to raise ₹700 crores in this IPO.
MobiKwik’s IPO dates are yet to be finalised. The available details are as follows:
| IPO size | ₹700 crores |
| Issue type | Fresh issue |
| Potential pre-IPO placement | ₹140 crores |
| Face value | ₹2 |
IPO reservations | 75% for Qualified Institutional Buyers15% for Non-Institutional Investors10% for retail investors |
Fund utilisation plan
- ₹250 crores towards funding the requirement of MobiKwik’s financial service business.
- ₹135 crores will be directed towards the firm’s payment business.
- ₹135 crores towards investments in data, artificial intelligence and other technology-related expenses.
- ₹70 crores towards the firm’s capital expenses.
- ₹100 crores may be used towards the acquisition of new customers, subject to the management’s discretion.
Also read: The rise of BharatPe: India’s leading fintech company
Should you invest in MobiKwik?
The financial landscape is currently going through a transformation in the country, with more and more players contributing to the digitisation of finance. MobiKwik is one such participant in the financial sector. Here are a few factors to consider before deciding to invest in MobiKiwk’s IPO.
Here is why you should
- The company has a strong network of people from different areas, that contributes significantly to the growth of the business. Retailers, lenders, customers and others are available in a single platform, offering benefits to the business and all the entities partnering with it.
- The customer acquisition cost of MobiKwik is relatively low as the firm mainly relies on search engine optimisation and mobile app store initiatives to acquire new customers. Referrals from existing customers are also an important source of customer acquisition for MobiKwik. The low cost of customer acquisition and these alternate strategies represent MobiKwik’s efficiency.
- The company has seen a steady growth in the number of registered users from close to 15 million in 2015 to 140 million in 2023.
- MobiKwik understands the significance of growing technology in all sectors. The firm is also adapting itself to new technology, data science and artificial intelligence concepts, to enhance customer experience.
You must watch out for
- Despite its widespread popularity, MobiKwik has been burning cash for the last few years. The firm’s revenue has not seen significant improvement, but the percentage of loss has come down by over 30% in FY 2023 compared to FY 2022. The firm expects to see profits in FY 2024, subject to its performance.
- Since the firm operates primarily in the digital finance business, it is prone to the risk of cyber-attacks. Since the application stores confidential customer information, data attacks and leaks can impact the business negatively.
- The fintech industry is constantly growing, with more and more players entering the market. MobiKwik’s ability to sustain competition is crucial in staying relevant in the market.
- Besides other services, MobiKwik offers BNPL (Buy Now Pay Later) services to its customers. The firm’s risk management strategies and credit recovery efficiency are crucial, as the failure of that can lead to an increase in bad debts.
Also read: Here’s everything you need to know about Ola Electric’s upcoming IPO
Bottomline
The news of MobiKwik filing a fresh prospectus with the regulator is currently making rounds in the market. Though the rise of fintech in India today makes MobiKiwk an appealing investment option, it is essential for investors to consider other factors, such as the firm’s losses and risks.
