Navigating the Future: Mobikwik’s Path to an $84 Million IPO

Mobikwik Systems Ltd., an eminent fintech player in India, is progressing with its plans for an Initial Public Offering (IPO) in Mumbai. The Gurugram-based company, known for its mobile wallet and buy now, pay later services, is targeting to raise approximately $84 million through this IPO, which is slated for 2024. This initiative follows Mobikwik’s achievement of profitability at the end of 2021, marking a significant milestone amidst a challenging environment for tech stocks. The company, boasting over 101 million users and partnerships with more than three million merchants, is supported by notable investors such as the Abu Dhabi Investment Authority, American Express, and Sequoia Capital​​.

Mobikwik initially filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on July 12, 2021, and received approval on October 11, 2021. The IPO comprises a fresh issue of shares worth ₹1500 crores and an offer for sale up to ₹400 crores, at a face value of ₹2 per equity share. The company was founded in 2009 by Bipin Preet Singh and Upasana Taku and has since become a leading mobile wallet and one of the largest Buy Now Pay Later (BNPL) players in India. The founders hold a 34.5% stake in the company, and major stakeholders like Sequoia Capital India and Bajaj Finance are looking to sell shares worth around ₹95 crore and ₹69 crore, respectively​​.

In terms of financial performance, Mobikwik has shown steady revenue growth over the past few years, which can be attributed to the increasing adoption of digital payments in India. However, the company also faced financial challenges, as evident from its financial reports: in 2019, it reported revenue of ₹160 crores against expenses of ₹302 crores, resulting in a loss of ₹147.97 crores. This was followed by a revenue of ₹370 crores and a loss of ₹99.92 crores in 2020, and revenue of ₹302 crores against ₹404 crores in expenses, leading to a loss of ₹111.30 crores in 2021. These figures indicate a pattern of growing revenue but persistent operational losses, highlighting the importance for potential investors to carefully assess aspects like profitability, debt levels, and cash flow​​​​.

The IPO’s lead managers include ICICI Securities Limited, BNP Paribas, Credit Suisse Securities (India) Private Limited, IIFL Securities Limited, and Jefferies India Private Limited​​.



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