MobiKwik, a fintech startup filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on Monday for its initial public offering (IPO). The firm intends to raise Rs 1,900 crore (~$255 million), as per its DRHP, which includes a fresh issue of Rs 1,500 crore and an offer for sale (OFS) of Rs 400 crore from its existing investors.
Mobikwik’s parent company One MobiKwik Systems Limited was co-founded by husband-wife duo Bipin Preet Singh and Upasana Taku in 2009 and holds 34.5 percent stakes in the company. Investment firm Sequoia Capital India and Bajaj Finance are aiming to sell roughly Rs 95 crore and Rs 69 crore worth of shares, respectively. As part of the offer for sale, the remaining investors such as American Express propose to sell their stakes as well.
According to sources familiar with the matter, the Gurgaon-based firm was valued at $700 million in its previous private funding round in April, where it raised Rs 150 crore ($20 million) from Abu Dhabi Investment Authority (ADIA). The company is now aiming for a public market valuation of $1 billion (~Rs 7,459 crore). MobiKwik’s total revenue declined by 18 percent i.e Rs 302 crore in the fiscal year ending March 31, 2021, while its losses increased 12 percent i.e Rs 111 crore.
The mobile wallet startup seeks to spend at least 40% of the overall IPO capital to endorse customer and merchant attraction and engagement through discounts, cashback, loyalty points, and other promotional schemes, as well as to invest in technical employees and R&D and improve the user and merchant overall experience.
The company’s draft red herring prospectus (DRHP) filings suggest that the offering includes an allocation of up to equity shares for its employees as well. The book managers for the Mobikwik IPO include ICICI Securities, BNP Paribas, Credit Suisse Securities (India) Private Limited, IIFL Securities, and Jefferies India. The company’s stocks will be traded on both the NSE and the BSE.
According to Crunchbase stats, the fintech startup has raised over $165 million to date. In the financial year of 2021, Mobikwik, claims to have over 101.37 million registered users and over 3.44 million e-commerce, physical retail, and biller partners. The company’s main business categories are BNPL (buy now, pay later), bill payment services, consumer payments, UPI, and payment gateways. The company also step its foot in mutual funds and small-ticket credit services.
Upcoming months for the year 2021 are likely to be a breakthrough moment for Indian tech startups, with a good number of tech companies planning to go public. Zomato will go public on Wednesday, June 14th, with a public offering aiming to collect Rs 9,375 crore. Paytm, the digital payment platform also plans to collect Rs 16,600 crore through its initial public offering. Nykaa and PolicyBazaar are both expecting to make their stock market entries this year.