A Gurugram-based fintech unicorn Mobikwik has received final approval from the Securities and Exchange Board of India (SEBI) to launch an initial public offer (IPO) worth Rs 700 crore.
The IPO will consist entirely of a fresh issue of shares of face value of Rs 2 each, and there will be no offer for sale.
The company could also consider raising an additional Rs 140 crore through a pre-IPO placement, which could involve methods like private placement, preferential allotment or rights issues.
Allocation of IPO funds
Mobikwik has laid out clear plans for the utilisation of the funds raised through its IPO. A significant portion, Rs 250 crore, will be spent on expanding its financial services business.
Additionally, Rs 135 crore will be used to strengthen its payment services, and another Rs 135 crore is allocated for investments in data, machine learning, artificial intelligence and other technological innovations.
Additionally, Rs 70.28 crore is earmarked for capital expenditure in its payment devices business, and the remaining funds will be used for general corporate purposes.
Financial recovery of the company
MobiKwik reported a net profit of Rs 14.1 crore for FY24, in stark contrast to its loss of Rs 83.8 crore for FY23.
The company’s operating revenue also saw a substantial increase, reaching Rs 875 crore in FY24 from Rs 540 crore in the previous fiscal.
What does MobiKwik do?
Founded by Bipin Preet Singh and Upasana Taku, Mobikwik offers a wide range of payment and financial services including Online Payment, Kwik QR Scan & Pay, MobiKwik Vibe (Soundbox), MobiKwik EDC Machine and Merchant Cash Advance.
Through its subsidiary Zaakpay, Mobikwik operates a B2B payment gateway for e-commerce businesses. Zaakpay has received approval from the Reserve Bank of India (RBI) to operate as a payment aggregator (PA).
As of the end of September 2023, Mobikwik had registered 146.94 million users and enabled 3.81 million merchants to process online and offline payments.
Growth in payment volume
The company witnessed robust growth in its payments gross merchandise value (GMV), which grew at a CAGR of 32.33%. Additionally, MobiKwik ZIP’s gross merchandise value (GMV) (disbursements) witnessed an impressive increase of 354.86% between FY2021 and FY2023.
SBI Capital Markets and DAM Capital Advisors are the lead managers for the IPO, and the shares are expected to list on the BSE and NSE.