Fintech unicorn has secured approval from market regulator to launch its initial public offering (IPO).
The regulator granted an observation letter to the Gurugram-based firm on September 19, giving it the go-ahead for its public offering. In SEBI’s terms, an observation letter signifies approval to move forward with the IPO.
According to the draft IPO filings, the issue will entirely comprise a fresh issue of equity shares with a face value of Rs 2 each, without any offer-for-sale (OFS) component.
The Gurugram-based company submitted its Draft Red Herring Prospectus (DRHP) to the market regulator on January 4, with the goal of raising Rs 700 crore through an IPO.
This offering represents a reduced size compared to the Rs 1,900 crore IPO that MobiKwik had initially filed in 2021.
Around Rs 250 crore from the fresh issue proceeds will be directed towards expanding the financial services business, while Rs 135 crore will be used to enhance the payment services segment. An additional Rs 135 crore is earmarked for investments in data, machine learning, artificial intelligence, and technology development. Furthermore, Rs 70.28 crore will be allocated for capital expenditures in the payment devices sector, with the remaining funds reserved for general corporate needs.
Following the submission of its DRHP, media reports suggested that MobiKwik has secured Rs 50 crore ($6 million) in debt financing through non-convertible debentures from BlackSoil Capital.
SBI Capital Markets and DAM Capital Advisors are the book-running lead managers for the IPO.
As of September 30, 2023, MobiKwik claims to have around 146.94 million registered users.
The mobile payments startup reported a 62% increase in revenue, reaching Rs 875 crore in FY24, compared to Rs 539 crore in FY23. The company also bounced back to profitability with a net profit of Rs 14 crore in FY24, reversing the Rs 84 crore loss from the previous fiscal year, according to filings with the Registrar of Companies (RoC).
The fintech company generated its revenue mainly from services, such as commissions on recharge sales, fees for money transfers, interest income, and processing fees associated with loan servicing through lending partners, technology platforms, and payment gateway services.
Founded in 2009 by Bipin Preet Singh and Upasana Taku, MobiKwik provides a range of payment and financial services to businesses and merchants, including a B2B payment gateway for e-commerce. The company has also received approval from the RBI for its payment aggregator business.
