MobiKwik Systems IPO Opens December 11 – Check Details

MobiKwik Systems IPO

MobiKwik Sets Price Band for ₹572 Crore IPO, Offering to Open on December 11

Digital payments firm One MobiKwik Systems Ltd has officially announced the price band for its Initial Public Offering (IPO), setting it at ₹265-279 per share.

This IPO, which is expected to raise ₹572 crore, represents a substantial reduction in size, marking the third revision since its original announcement.

The issue is set to open on December 11, 2024, and will close on December 13, 2024. Meanwhile, anchor investors will have the opportunity to place their bids a day earlier, on December 10, with the final allotment scheduled for December 16.

The company’s shares are expected to be listed on the stock exchanges on December 18, 2024.

Initially, the company had sought to raise ₹700 crore with its IPO filing in January 2024. However, the size of the offering has been scaled back multiple times.

Originally, the company had received approval for a much larger IPO worth ₹1,900 crore in July 2021, but market conditions and the poor performance of other startup IPOs led to a delay in its execution.

Now, the final size of the offering stands at ₹572 crore, indicating the company’s shift in strategy to align with the current market conditions.

The Use of IPO Proceeds

A significant portion of the funds raised through this IPO will be used to fuel the next phase of growth for MobiKwik.

The company has outlined a clear plan for utilizing the proceeds from the new share issuance, aimed at strengthening its financial services, expanding its payment network, and driving technological innovation.

Here’s a breakdown of how the IPO proceeds will be allocated:

• ₹150 crore for Financial Services Expansion: MobiKwik plans to use a large chunk of the raised funds to expand its financial services business. This includes enhancing its existing offerings in the credit space, such as MobiKwik ZIP and ZIP EMI, which allow customers to access instant credit and make flexible payments. The company intends to capitalize on its growing base of users who are increasingly turning to digital credit solutions, especially in tier-2 and tier-3 cities.
• ₹135 crore for Payment Services Growth: Another significant portion of the IPO proceeds will go towards expanding MobiKwik’s payment services. The company plans to deepen its penetration in the growing market for digital payments, which includes transactions via its mobile wallet, Unified Payments Interface (UPI), and Zaakpay—its gateway for businesses to accept online payments. With digital payments on the rise across India, MobiKwik aims to tap into the surge in online transactions, particularly with the increasing adoption of UPI-based payments.
• ₹107 crore for Technology and Innovation: As part of its long-term strategy, MobiKwik plans to invest heavily in research and development to enhance its technological capabilities, including artificial intelligence (AI) and machine learning. The company believes that AI-driven innovations will help improve customer experience, streamline its services, and offer smarter, more personalized financial solutions. The funds will also be directed towards further strengthening its technology infrastructure and enhancing its mobile payment platforms.
• ₹70.2 crore for Capital Expenditure on Payment Devices: To support its ever-growing payment ecosystem, MobiKwik plans to use ₹70.2 crore towards capital expenditure for payment devices. These funds will help the company enhance its physical infrastructure, including the acquisition and distribution of point-of-sale (POS) terminals and other payment-related devices that will facilitate transactions at retail outlets and merchant locations across India.

Company Overview and Business Model

MobiKwik’s journey began as a mobile wallet provider, but over the years, the company has evolved into a digital financial services powerhouse.

As of May 2024, MobiKwik was recognized as India’s largest mobile wallet company, with millions of users actively utilizing its platform for various financial needs.

Beyond its core wallet services, MobiKwik now offers a wide range of financial products and services, including:

• Credit Products: The company’s MobiKwik ZIP and ZIP EMI allow customers to make instant purchases and pay later in easy installments. These products cater to the needs of consumers who seek credit but may not have access to traditional banking channels, especially in India’s tier-2 and tier-3 cities.
• Digital Payments: MobiKwik’s platform supports a variety of digital payment solutions, including mobile wallet transactions, UPI payments, and merchant payment gateways via Zaakpay. With a seamless and user-friendly interface, MobiKwik is positioned as a one-stop shop for digital payments, serving both consumers and businesses.
• Peer-to-Peer Lending: Through MobiKwik Extra, the company has ventured into the growing space of peer-to-peer lending, offering customers the opportunity to lend and borrow money within the MobiKwik ecosystem.

With the growing adoption of digital finance, mobile wallets, and online payments in India, MobiKwik is well-positioned to benefit from the rapidly expanding market, which is fueled by the government’s push for a cashless economy and increasing smartphone penetration across the country.

Financial Performance and Outlook

MobiKwik’s financial performance has seen an upward trajectory, reflecting its ability to adapt to the evolving digital payments landscape.

The company posted a revenue of ₹875 crore for the fiscal year FY24, a significant increase from the ₹539.46 crore it earned in the previous fiscal year.

The company’s growth trajectory has been fueled by its broadening product offerings and increasing user base.

Moreover, MobiKwik reported a net profit of ₹14.08 crore for FY24, a remarkable improvement from the ₹83.81 crore loss the company incurred in FY23.

This shift towards profitability demonstrates MobiKwik’s ability to scale its business and reduce losses, a key factor that is likely to boost investor confidence as it heads into the IPO.

In the April-June 2024 quarter, MobiKwik posted a revenue of ₹342.27 crore, with a net loss of ₹6.62 crore.

While the company is still in the process of achieving sustained profitability, its focus on expanding both its user base and its product offerings could help further strengthen its financial position.

Final Remarks

The MobiKwik IPO represents a significant milestone for the company as it takes the next step in its growth journey.

With a solid business model, strong market presence, and innovative product offerings, MobiKwik is well-placed to capitalize on the growing digital payments and financial services market in India.

Investors will be closely watching this IPO, given the company’s impressive financial recovery and its future prospects in the rapidly expanding fintech sector.

With a price band of ₹265-279 per share and the IPO set to open on December 11, MobiKwik offers a compelling opportunity for those looking to invest in India’s next-generation digital finance leader.