Sun Dec 08 21:28:08 UTC 2024: **MobiKwik Launches IPO at Significantly Discounted Valuation**
MUMBAI, INDIA – MobiKwik, a mobile wallet and financial services company, is launching its initial public offering (IPO) on Wednesday, with a price band of ₹265-₹279 per share. This values the company at approximately ₹2,165 crore (approximately $260 million USD), a substantial discount from its ₹7,600 crore valuation sought in a previous attempt in 2021.
The reduced valuation reflects the current challenging market conditions and changes in the fintech landscape. Co-founder Upasana Taku attributed the downward revision to market volatility, recent RBI sanctions against some fintech companies, and the timing of SEBI approval. The company initially aimed to raise ₹700 crore but has lowered its fundraising target to ₹572 crore.
MobiKwik, founded in 2009, offers a range of services including mobile payments (36% of revenue), digital credit (MobiKwik ZIP), investments, and insurance products (64% of revenue). The IPO proceeds will be allocated to expand its financial services and payments businesses, invest in AI/ML research and development, and fund capital expenditure.
The company’s future growth strategy focuses on the UPI market, targeting a niche with revenue-generating potential. However, MobiKwik plans to scale down its buy now, pay later (BNPL) offerings due to negative market sentiment and cautious bank partnerships. It also reported a net profit of ₹14 crore in FY24, its first since inception, after a loss of ₹83.8 crore the previous year. Revenue for FY24 reached ₹890.32 crore, a 59% increase.
The IPO consists entirely of a fresh issue of shares, with no offer-for-sale component. While the reduced valuation represents a significant discount for existing investors, Taku noted that they will have opportunities after the listing if the company performs well. The IPO launch comes amidst a slowdown in India’s IPO market, partly due to weak sentiment and disappointing recent listing performances.
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