 "MobiKwik cuts issue size for third time, sets price band at Rs 265-279")
Fintech firm MobiKwik is all set to launch its initial public offering (IPO) on December 11.
The company has cut down its IPO size for the third time since it floated its listing plans three years back to Rs 572 crore from its 2021 plans of raising Rs 1,900 crore from the market.
The IPO is entirely a fresh issue and there is no offer-for-sale component. The fintech company has set the price band at Rs 265-279 per share.
The Gurugram-based company’s IPO closes on December 13. Anchor bidding for the IPO will begin on December 10.
When asked about a cut in the IPO valuation, the company’s co-founder and chief executive officer (CEO) Bipin Preet Singh said it wanted to leave value for investors post listing even if it meant a reduction in valuation.
“It is disappointing for investors if an IPO with an elevated valuation does not perform following listing. People believe these are bad businesses with a lot of cash burn but somebody has to change that. Even if it means getting a cut in valuation we are fine with it,” Singh said.
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In 2021, the company initially filed for a Rs 1,900-crore IPO, which it further cut to Rs 700 crore in January this year. The company plans to raise Rs 572 crore from the markets this time.
Of the net proceeds of the IPO, the firm will allocate Rs 150 crore to expand its financial services business, Rs 135 crore for its payments business and Rs 107 crore for research and development (R&D) in data, artificial intelligence (AI), machine learning (ML), product and technology. The remaining Rs 70.2 crore would be allocated for capital expenditure involving its payment devices business.
“We will be making more investment towards payments since that is our flagship business. Initially, we built the financial services business by offering a first loss default guarantee (FLDG) to lenders. But with the newer products we are doing, we don’t necessarily need that kind of capital,” Singh added.
The company has a base of 155.85 million registered users as of FY24. In terms of the wallet market share in terms of users, the firm is the third largest, following Paytm and PhonePe, with a base of 135.41 million customers. However, it is the largest wallet player processing 23.1 per cent of the prepaid payment instrument (PPI) gross transaction values.
In FY24, MobiKwik recorded its first full profitable year, reporting a profit after tax (PAT) of Rs 14.08 crore, following a loss of Rs 83.8 crore in FY23. In Q1FY25, the company posted a Rs 6.6 crore loss.
Singh added that the company had not raised any equity capital in the past three years but required debt to service its working capital needs.
“We are focusing on making sure that we are profitable and growing. We want to ensure our margins are growing and we reinvest that back in growth,” he added.
The promoters and the promoter group hold 32.87 per cent stake in the company prior to the issue. Singh said promoter holding would go down to 24 per cent post listing. Vishal Mega Mart sets price band at Rs 74-78
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