Gurugram-based fintech unicorn Mobikwik received final approval from the Securities and Exchange Board of India (SEBI) to launch an initial public offering (IPO) worth Rs 700 crore.
The IPO will consist entirely of a fresh issue of shares with a face value of Rs 2 each, and there will be no offer for sale component.
The company could also explore raising an additional Rs 140 crore through a pre-IPO placement, which could involve methods such as private placement, preferential allotment or rights issues.
Allocation of IPO funds
Mobikwik has outlined clear plans for the use of the funds raised through its IPO. A major portion, Rs 250 crore, will go towards expanding its financial services business.
Additionally, Rs 135 crore will be used to strengthen its payment services, and another Rs 135 crore will be allocated for investments in data, machine learning, artificial intelligence and other technological innovations.
Additionally, Rs 70.28 crore will be earmarked for capital expenditure on its payment devices business, with the remaining funds to be utilised for general corporate purposes.
Financial recovery of the company
MobiKwik reported a net profit of Rs 14.1 crore in FY24, a stark contrast to its loss of Rs 83.8 crore in FY23.
The company’s operating income also saw a substantial increase, reaching Rs 875 crore in FY24, up 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 financial and payment 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 targeting e-commerce businesses. Zaakpay has received approval from the Reserve Bank of India (RBI) to operate as a Payment Aggregator (PA).
By the end of September 2023, Mobikwik had registered 146.94 million users and enabled 3.81 million merchants to process payments both online and offline.
Growth in payment volume
The company has seen robust growth in its gross merchandise value (GMV) of payments, which has grown at an annual rate of 32.33%. Additionally, its MobiKwik ZIP GMV (disbursements) has seen an impressive increase of 354.86% between FY21 and FY23.
SBI Capital Markets and DAM Capital Advisors are the lead managers for the IPO and the shares are expected to be listed on the BSE and NSE.
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