Gurugram based fintech major MobiKwik has filed its Red Herring Prospectus (RHP) with the Securities and Exchange Board of India (SEBI) for its long-anticipated initial public offering (IPO).
The IPO, reduced from its original size of INR 700 Crore to INR 572 Crore, will open for subscription on December 11 and close on December 13, 2024.
The company has set a price band of INR 265–279 per share, which, at the upper limit, values MobiKwik at approximately INR 2,165 Crore. Each share will have a face value of INR 2.
Allocation of IPO Proceeds
According to the RHP, MobiKwik plans to utilize the proceeds to strengthen its financial and technological infrastructure. The proposed allocations include:
- INR 150 Crore for the expansion of its financial services business.
- INR 135 Crore for bolstering its payments service business.
- INR 107 Crore for research and development in data, machine learning (ML), artificial intelligence (AI), and product technology.
- INR 70.28 Crore for capital expenditure on its payment devices business.
- A portion will also be allocated to general corporate expenses.
A Profitable Shift in FY24
MobiKwik turned profitable in FY24, reporting a net profit of INR 14.1 Crore, a sharp reversal from its net loss of INR 83.19 Crore in FY23.
This profitability was driven by strong revenue growth, with operational revenue surging 62% to INR 875 Crore compared to INR 539.5 Crore in the previous fiscal year.
A Revised Offering
The fresh issue size represents an 18% reduction from its initial target of INR 700 Cr as outlined in its draft red herring prospectus (DRHP) earlier this year.
Unlike many other IPOs, MobiKwik’s offering does not include an offer-for-sale component, emphasizing its focus on raising capital for business growth rather than providing exits to existing shareholders.
IPO Context and Industry Buzz
MobiKwik’s IPO comes shortly after the public listings of BlackBuck and Swiggy in November 2024, signaling heightened activity in India’s IPO market.
This move is seen as a significant step for MobiKwik as it aims to consolidate its position in India’s fintech space.
The company, known for its digital wallet and payment gateway services, has also been diversifying into financial services and AI-driven technology solutions to stay ahead in the competitive market.
