MobiKwik Cuts IPO Size Again—Price Band Set at Rs 265-279 Per Share
MobiKwik, the popular digital payments and fintech company, has made another adjustment to its much-anticipated Initial Public Offering (IPO). Originally filing for a massive Rs 1,900 crore IPO in 2021, the company has now trimmed the size to Rs 572 crore, marking its third revision. While this latest cut may raise some questions, MobiKwik still plans to go ahead with the launch of its IPO on December 11, with a revised price band of Rs 265 to Rs 279 per share.
The decision to reduce the IPO size comes amidst fluctuating market conditions and a slower-than-expected performance of peer startups in the public markets, leading to uncertainty. This article breaks down all the key details about MobiKwik’s revised IPO, its objectives, and what potential investors can expect when they get their hands on the offering.
What is MobiKwik’s IPO Offering?
MobiKwik, which connects millions of users to a range of financial services, has set its IPO price band between Rs 265 to Rs 279 per share. The company aims to raise Rs 572 crore by issuing new equity shares, and this capital will be used to fuel its growth across several critical business areas.
Here’s a breakdown of how the funds will be allocated:
- Rs 150 crore: Expansion of financial services.
- Rs 135 crore: Growth in payment business.
- Rs 107 crore: Research and Development (R&D) for AI, Machine Learning (ML), and tech development.
- Rs 70.2 crore: Investment in payment devices and capital expenditures.
The IPO will open for subscriptions on December 11, 2024 and will close on December 13, 2024. The anchor bidding will begin on December 10, and the stock is expected to list on December 18, 2024.
Who Can Invest?
MobiKwik’s IPO is targeting different types of investors. Here’s how the shares will be allocated:
- 75% for Qualified Institutional Buyers (QIBs) – Large institutional investors like mutual funds, insurance companies, and pension funds will have the lion’s share.
- 15% for Non-Institutional Investors (NIIs) – High-net-worth individuals and companies can also participate.
- 10% for Retail Investors – Small investors, who want to buy shares, can take part in this portion of the offering.
For retail investors, the minimum lot size is 53 shares, which will cost around Rs 14,787 at the upper price band.
MobiKwik’s Journey: From Startup to Digital Payment Giant
Founded by Bipin Preet Singh and Upasana Taku in 2009, MobiKwik has grown to become a leading fintech player in India. The company serves as a bridge for financial inclusion, especially for underserved communities in India. With 161 million active users and 4.26 million merchants, MobiKwik offers a wide range of services, including:
- Digital wallets for easy payments and money transfers.
- UPI services for seamless transactions.
- Peer-to-peer lending and credit products to support financial empowerment.
As of May 2024, MobiKwik holds a 23.11% market share in Prepaid Payment Instruments (PPI) wallet transactions, making it India’s largest wallet player.
Strong Growth and Financial Performance
MobiKwik has shown impressive growth in recent years. The company posted a 62% revenue growth in FY24, generating Rs 875 crore, up from Rs 539 crore in FY23. Even more impressive, MobiKwik achieved a net profit of Rs 14.08 crore in FY24, bouncing back from a loss of Rs 83.81 crore in the previous fiscal year.
However, despite the positive growth, the company posted a net loss of Rs 6.62 crore in Q1 FY25, though it reported revenues of Rs 342.2 crore during the same period. This demonstrates that while MobiKwik is on an upward trajectory, it still faces challenges in sustaining profitability, particularly during early growth stages.
Why the IPO Revision?
The decision to revise MobiKwik’s IPO size for the third time is largely due to subdued market conditions and lackluster performance of similar startups after they went public. The fintech sector has faced its share of challenges, especially after the IPOs of other startups, which have been under pressure in the stock market.
In January 2024, MobiKwik revised its IPO size to Rs 700 crore, and now it has been further reduced to Rs 572 crore. Despite these cuts, the company remains confident that the funds raised will enable it to expand its services, invest in new technologies, and grow its payment business.
The Road Ahead for MobiKwik
With the IPO set to open in December, MobiKwik is gearing up to become the next big player in the Indian stock market. It’s important for investors to assess the risks and opportunities, particularly given the company’s solid growth trajectory but recent struggles with profitability.
The funds raised from this IPO will help MobiKwik expand its financial services, payment solutions, and technology initiatives, which could pay off in the long run if the company continues to capture a growing share of the Indian market.
Will MobiKwik’s IPO Be a Success?
Investors are keeping a close eye on MobiKwik’s IPO, especially with the reduced size and pricing. While there are challenges ahead, the company’s strong brand, large user base, and strategic investments in financial technology could make it a solid choice for long-term investors.
The Indian fintech sector is booming, and MobiKwik’s established presence, along with its competitive market position, makes this IPO one to watch. However, prospective investors should evaluate the risks involved, as market conditions remain volatile.
Conclusion: Is MobiKwik’s IPO Worth Investing In?
MobiKwik’s revised IPO presents a unique opportunity for retail investors to get involved in one of India’s leading fintech companies. Despite the trimmed size and the challenges in the market, MobiKwik’s strong growth potential in digital payments, financial services, and technology development is impressive.
As the IPO opens in December, investors will have to weigh the prospects of a rapidly growing sector against the current market dynamics. While the fintech space offers exciting opportunities, the revised IPO size suggests that MobiKwik is being cautious in its approach—making it a high-risk, high-reward investment.
If you’re looking to invest in a promising fintech startup, MobiKwik’s IPO could be worth considering. But make sure to carefully assess your risk tolerance before taking the plunge.
