MobiKwik Systems Ltd Files Second DRHP for IPO, Aims to Raise ₹700 Crore: 7 Key Insights from the Prospectus

MobiKwik Systems Ltd, a Gurugram-based digital payment platform, has recently filed its draft red herring prospectus (DRHP) for an initial public offering (IPO) with the Securities and Exchange Board of India (SEBI) for the second time. The IPO, featuring fresh equity share issues without an offer for sale component, seeks to raise ₹700 crore. Here are seven crucial details from the DRHP that investors should be aware of:

1. IPO Issue Details:

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MobiKwik Systems aims to raise ₹700 crore through its IPO. Additionally, the company may consider a “pre-IPO placement” of additional specified securities, amounting to ₹140 crore, through private placement, preferential allotment, rights issue, or other methods in consultation with the book-running lead managers (BRLM). The final size of the fresh issue may vary if such placement occurs.

Also Read: Mobikwik Refiles Draft Papers with IPO Size Cut Down to Rs 700 Crore

2. IPO Objective:

The company intends to allocate ₹250 crore from the IPO proceeds towards expanding the financial services sector, ₹135 crore for the growth of payment services, ₹135 crore for investments in data, machine learning, artificial intelligence, and other technological advancements, ₹70.28 crore for capital expenditures related to payment devices, and the remainder for general corporate purposes.

3. IPO Reservations:

MobiKwik IPO has earmarked a minimum of 75% of the shares for Qualified Institutional Buyers (QIB), up to 15% for Non-Institutional Investors (NII), and a maximum of 10% for Retail Investors.

Also Read: Vraj Iron and Steel Files DRHP for Rs 171 Crore IPO: Aiming for Expansion and Debt Repayment

4. Mobikwik Business:

MobiKwik’s flagship application has witnessed a significant growth in its user base, adding over 18.29 million new users annually between Fiscal 2021 and September 30, 2023. The application provides users with access to various digital payment options and financial products, including digital credit, investments, and insurance.

5. IPO Peers:

While MobiKwik acknowledges that there are no directly comparable companies in India or globally with a similar business model and comparable size, it considers One 97 Communications Ltd (with a P/E of 23.11) as its listed peer, and Affirm Holdings, Inc (with a P/E of 15.74) and PayPal Holdings, Inc (with a P/E of 28.11) as its listed global peers.

Also Read: Rays Power Infra Takes a Big Step Towards IPO: Files DRHP with SEBI

6. IPO Promoters:

The company’s promoters include Bipin Preet Singh, Upasana Rupkrishan Taku, Koshur Family Trust, and Narinder Singh Family Trust.

7. Financials:

MobiKwik’s revenue from operations for the fiscal year 2022–2023 increased to ₹539.47 crore from ₹526.56 crore in the previous fiscal year. Moreover, the company managed to reduce its loss from ₹128.16 crore in the fiscal year 2022 to ₹83.81 crore in the fiscal year 2023. In the six months ending on September 30, 2023, the company reported a revenue from operations of ₹381.09 crore, with a profit after taxes amounting to ₹9.48 crore.

Also Read: Shree Tirupati Balajee Agro Trading Company Files IPO Papers with SEBI, Aims to Raise Funds

MobiKwik’s IPO filing is expected to generate significant interest among investors as the company seeks to tap into the growing digital payments and financial services market in India. The IPO is poised to be a significant development in the Indian fintech sector, with investors closely watching its progress through the regulatory approval process.

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