MobiKwik is all set to make its second attempt to go public by raising Rs 700 crore through the public, having deferred a similar bid in 2021 owing to market volatility.
One MobiKwik Systems, the parent company of fintech firm MobiKwik, is filing a new draft red herring prospectus (DRHP) with the Securities and Exchange Board of India, aiming to raise Rs 700 crore through a fresh issue of shares.
The firm's fresh bid marks a more than 60 per cent reduction from its previous IPO plan of Rs 1,900 crore.
MobiKwik had earlier deferred its initial public offering (IPO) citing market volatility and the underwhelming market debut of its larger competitor, Paytm.
One97 Communications Ltd, the company that owns the digital payments app Paytm, experienced a significant setback as it witnessed a 27 per cent decline in its share price on the day it was listed. The decline came as a disappointment for domestic retail investors who had high expectations from the Rs 18,300 crore IPO.
MobiKwik's co-founder and CEO, Bipin Preet Singh, cited the multi-fold growth in the company's digital credit gross merchandise value (GMV) in the recent years the reason behind the move.
The move is seen as a strategic step to strengthen MobiKwik's position in the ever-evolving financial technology landscape.
Even though MobiKwik has submitted the DRHP to SEBI, specific details such as the price range, lot size, and dates for the IPO haven't been confirmed yet. These details will only be disclosed when the RHP (Red Herring Prospectus) is made public after receiving approval.
The Rs 700 crore IPO will solely consist of a fresh issue of shares, and there won't be any offer for sale (OFS) component.
According to the DRHP, 75 per cent of the shares will be reserved for qualified institutional buyers, 15 per cent for non-institutional investors, and no more than 10 per cent for retail individual buyers.
This ensures that different types of investors have the opportunity to participate in the IPO based on their qualifications and preferences. Unlike the previous IPO plan, the current filing does not include an offer for sale (OFS) component.
MobiKwik intends to utilise the Rs 700 crore raised from the IPO in different areas. They plan to allocate Rs 250 crore to support the growth of their financial services business, Rs 135 crore for the expansion of payment services, and an additional Rs 135 crore for advancements in data and artificial intelligence.
More than Rs 70 crore will be earmarked for capital expenditure, which includes various operational expenses and investments to enhance the overall business infrastructure.
The draft filing said, "Our management will also have the discretion over the specific activities that will be funded towards certain Objects. For instance, we intend to utilize ₹100 crore from the Net Proceeds towards acquisition of new consumers and merchants on our platform."
The company reported a revenue of Rs 381 crore and a profit of Rs 9.5 crore for the six months ending September 2023.
The IPO filing is in line with broader trends in the primary market, where 55 out of 59 IPOs in 2023 provided an average return of 45 per cent, surpassing the 20 per cent rally in benchmark indices as of December 29.
Tata Technologies had zoomed 168 per cent after its blockbuster debut, marking it as the best listing in the last two years.
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