The year 2021 has been a great year for IPO season, many giants got listed in the stock market, this year IPO season will start with most awaited IPO that is MobiKwik IPO, before we dive deep into IPO details, let understand what is MobiKwik.
Have you ever encountered a situation when you want to transfer money to someone through IMPS because you can’t move out or pay the shopkeeper via UPI after realizing that you’re short of cash? Well, I’m sure you must have faced a similar situation at least once in your life. Then on what do we rely upon? Of course, an online payments app. Well, MobiKwik is one of them.
One Mobikwik Systems is a fintech company that was incorporated in 2009 and is one of the biggest and the oldest digital payments wallet systems and Buy Now Pay Later (BNPL) platforms in India. In addition to providing all the features of a customer payments app, it renders a credit-providing system and a payment gateway as well. Its operations are divided among three major fields:
- Consumer Payments– Consists of Mobikwik Wallet that is a mobile payments app;
- BNPL– Consists of MobiKwik ZIP and ZIP EMI that primarily provides small credits to the users for various expenditures; and
- Payment Gateway– Consists of its self-made payment gateway, Zaakpay, which offers end-to-end payment solutions to online merchants.
MobiKwik IPO Details
The One MobiKwik IPO has been in the news for quite a long time and the speculations grew even stronger after the Paytm IPO. Earlier, it was expected to be launched by the end of 2021 but now reports suggest that One MobiKwik IPO will be stepping into the BSE and NSE in January 2022. Here are some details of the One MobiKwik IPO at a glance:
MobiKwik IPO Timetable
|IPO Open Date||January 2022|
|IPO Close Date||January 2022|
|IPO Size||₹ 1900 Cr (approx.)|
|Fresh Issue||₹ 1500 Cr (approx.)|
|Offer for Sale||₹ 400 Cr (approx.)|
|Face Value||₹ 2 Per Equity Share|
|Price Band||₹- to ₹- Per Equity Share|
|Listing Platforms||BSE and NSE|
- Issue Size and Distribution
As per the Draft Red Herring Prospectus (DRHP), the One MobiKwik IPO is expected to raise a capital of ₹ 1900 Cr from the investors which would include a fresh issue of ₹1500 Cr and an offer for sale of the existing shares worth ₹ 400 Cr. A detailed account of the distribution of the issue is given below-
- Book Building Proportion
From the pool of ₹ 1900 Cr, the One Mobikwik IPO has allocated a minimum of 75% of the issue for QIB; a total of about 15% of the issue for NII; and the remaining 10% for the Retail Investors. Apart from this, the DRHP also mentions an “Employees’ Reservation” in the issue but the allocation for the same is not yet known.
- Sale Offer Participants
A total of ₹ 400 Cr is to be offered for sale in the One MobiKwik IPO out of which American Express Travel Related Services would be selling shares worth ₹ 10 Cr, Bajaj Finance (₹ 69 Cr), Sequoia Capital (₹ 95 Cr), Cisco Systems (₹ 11 Cr), Tree Line Asia Master Fund Pte. (₹ 24 Cr), and the co-founders of Mobikwik Bipin Preet Singh (₹ 113 Cr) and Upasana Taku (₹ 78 Cr).
Objects of Issue
According to the DRHP, the net proceeds of the One Mobikwik IPO are to be utilized in the following manner:
- A minimum of 40% of the proceeds for funding organic growth initiatives;
- An undisclosed percentage of the proceeds for funding the inorganic growth actions; and
- A maximum of 25% of the proceeds for some general corporate purposes.
From the financial statements, released by the company in the last 3 years, we can say that it is a loss reporting company. With total revenue of ₹ 302 Cr and total expenses of ₹ 413 Cr, One Mobikwik reported a net loss of ₹ 111 Cr in FY 2021. The company had reported a net loss of ₹ 100 Cr in FY 2020.
The company has a total of 4 promoters namely, Bipin Preet Singh, Upasana Rupkrishan Taku, Koshur Family Trust, and Narinder Singh Family Trust. As of the date of filing the DRHP, the promoters Bipin Preet Singh and Upasana Taku hold 20.21 and 14.31 percent shareholding in the company. In addition to this, American Express Travel Related Services hold 1.81% shareholding, Bajaj Finance Limited (13.86%), Cisco Systems Pte. Ltd. (2.08%), Sequoia Capitals (17.25%), and Tree Line Asia Master Fund (4.43%) adding up to a total of 73.95%.
Registrar and Lead Managers
Link Intime India Private Limited has been appointed as the registrar for the One MobiKwik IPO. In addition to this, the following companies are appointed as the lead managers of the One MobiKwik IPO:
- ICICI Securities Limited
- BNP Paribas
- Credit Suisse Securities (India) Private Limited
- IIFL Securities Limited
- Jefferies India Private Limited
Lastly, we would say that demonetization and the introduction of UPI brought a great impact on the way we pay. With Paytm and Mobikwik being the top leaders, these apps grew exponentially since then. The One Mobikwik IPO can be among the ones getting the early mover advantage in the share market. Having a single competitor in the market, Paytm, that didn’t prove to be fruitful enough for the investors since day one, One Mobikwik IPO can be a good alternative for the people who thrive to invest in a fintech company and would also help the company to attain its goal of $1 billion valuation post-IPO.