MobiKwik files for ₹1,900 crore share sale
The MobiKwik IPO comprises a sale of ₹1,500 crore worth of new shares and an offer for sale of stock worth ₹400 crore by its promoters and shareholders
Payments firm One MobiKwik Systems Ltd on Monday filed draft share sale documents with the market regulator to raise as much as ₹1,900 crore, joining a host of new-age technology companies racing to tap public market investors.
The MobiKwik IPO comprises a sale of ₹1,500 crore worth of new shares and an offer for sale of stock worth ₹400 crore by its promoters and shareholders.
Tech startups such as MobiKwik are rushing to take advantage of the positive sentiments created by a record-breaking stocks rally, burgeoning public interest in technology shares and the accelerated adoption of online services in the past year because of the pandemic.
Food delivery platform Zomato Ltd’s ₹9,375 crore IPO will open for subscription on 14 July, while other startups such as online cosmetics retailer Nykaa and insurance aggregator PolicyBazaar are expected to file their draft IPO papers with the Securities and Exchange Board of India later this month. On Monday, shareholders of payments firm Paytm approved its ₹16,600 crore IPO.
Among MobiKwik’s shareholders participating in the offer for sale are American Express Travel Related Services, which plans to sell shares worth as much as ₹9.98 crore, Bajaj Finance ( ₹68.98 crore), Sequoia Capital ( ₹95 crore), Cisco Systems ( ₹11.48 crore), Tree Line Asia Master Fund Pte ( ₹24.41 crore) and MobiKwik co-founders Bipin Preet Singh ( ₹113.33 crore) and Upasana Taku ( ₹78.82 crore).
Singh and Taku hold 20.21% and 14.31% in the company, respectively. Bajaj Finance owns 13.86%, while Sequoia Capital India Investment has 13.46%.
ICICI Securities, BNP Paribas, Credit Suisse, IIFL Securities and Jefferies India will manage MobiKwik’s share sale.
On 22 February, Mint first reported that MobiKwik plans to go public and has hired investment banks ICICI Securities and IIFL, besides a few law firms, to kick-start work on the draft red herring prospectus.
In its draft IPO documents, MobiKwik said 40% of the net proceeds will be used to fund organic growth initiatives, “including customer and merchant acquisition and retention, investment in data-sciences, products and technology, enhancement of the user and merchant experience on our platform, providing cash-collateral to buy-now, pay-later lending partners”. The firm also plans to use the proceeds for applying for additional licence approvals and authorizations that will require it to maintain minimum capitalization and net-worth requirements.
The Gurgaon-based firm said it will continue to seek attractive inorganic opportunities that will fit well with its strategic business objectives and growth strategies, and the amount of net proceeds to be used for acquisitions will be based on its management’s decision.
For fiscal 2021, the firm reported a total income of ₹302.26 crore, up from ₹ 369.85 crore a year ago. Net loss for the period widened to ₹111.30 crore from ₹99.92 crore in the previous year.
Mobikwik’s business is divided into three segments—buy now, pay later; consumer payments (MobiKwik Wallet); and payment gateway (Zaakpay).
Its buy now, pay later products—MobiKwik Zip and Zip EMI—provide accessible and affordable small-ticket credit to middle-class Indians. It also cross-sells small-ticket wealth and insurance products to these users.
As of March 2021, its merchant base in India totalled more than 3.44 million. It has more than 101.37 million registered users.
In its IPO papers, MobiKwik said a forensic audit done by the company after news reports of a data breach in March did not reveal any unauthorized access from outside or internally to the database server that stores customer data.
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