Digital payment and financial services platform MobiKwik, gearing up for its initial public offering (IPO), is set to raise a term loan of INR 10 Cr from Equentia Financial Service Private Limited, commonly known as CredAble. The decision to avail the loan was formalized through a resolution passed by MobiKwik’s board on January 16, signaling strategic financial preparation ahead of its IPO.
This development follows closely on the heels of MobiKwik filing its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The IPO aims to generate up to INR 700 Cr through fresh issues of shares, without an offer for sale (OFS) component.
It’s noteworthy that MobiKwik has downsized its IPO size by nearly 63% from its initial target of INR 1,900 Cr stated in its 2021 DRHP. Originally, the plan included raising INR 1,500 Cr through fresh issue of shares and INR 400 Cr via OFS. The decision to scale down was influenced by volatile market conditions, prompting the startup to shelve its IPO plans temporarily.
Despite the adjustment, MobiKwik has demonstrated improved financial performance, achieving profitability in the first six months of FY24. The startup reported a net profit of INR 9.5 Cr during this period, with operating revenue reaching INR 381 Cr, accounting for almost 70% of the revenue earned in the previous fiscal year.
For comparison, MobiKwik’s net loss reduced by 35% to INR 83.8 Cr in FY23 from INR 128.1 Cr in the previous fiscal year. However, operating revenue remained relatively stable at INR 539.4 Cr in FY23.
Established in 2009 by Bipin Preet Singh and Upasana Taku, MobiKwik has evolved into a digital banking platform offering a diverse range of financial products for both consumers and merchants. The startup’s suite of services includes online checkout, Kwik QR scan and pay, MobiKwik Vibe (Soundbox), MobiKwik EDC Machine, and Merchant Cash Advance.
MobiKwik achieved unicorn status in October 2021 and has garnered approximately $177 Mn in funding across multiple rounds. Key backers include Peak XV Partners and Abu Dhabi Investments Authority.
