MobiKwik Secures Rs 257 Crore from Anchor Investors Ahead of Upcoming IPO

One MobiKwik Systems, a fintech firm, has raised Rs 257 crore from anchor investors before its IPO. The anchor round saw participation from both foreign and domestic institutions, including Government Pension Fund Norges Fund, Eastspring Investments, Morgan Stanley Investments, White Oak Capital, 360 One Asset & Wealth Management, HDFC Mutual Fund, Axis Mutual Fund, SBI Mutual Fund, and SBI General Insurance.

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The company has allocated 92.26 lakh equity shares to 21 funds at Rs 279 each, the top end of the price range. This allocation results in a transaction size of Rs 257.4 crore. The IPO will consist entirely of fresh equity shares worth up to Rs 572 crore and will not include any offer-for-sale portion. The subscription period is set for December 11 to 13.

Investment Plans and Stakeholders

According to the Red Herring Prospectus, Peak XV Partners (formerly Sequoia Capital India) holds a 16.7% stake in MobiKwik, while the Abu Dhabi Investment Authority owns a 2.8% share. The proceeds from the fresh issue will be used for various purposes: Rs 150 crore for organic growth in financial services, Rs 135 crore for expanding payment services, and Rs 107 crore for research and development in AI and technology.

Additionally, Rs 70.2 crore from the IPO will be allocated for capital expenditure on payment devices and general corporate purposes. This marks MobiKwik's second attempt at going public after withdrawing its initial plans in July 2021 due to market conditions.

Company Overview and Financial Performance

MobiKwik's flagship app offers users access to digital credit, investments, insurance, and various payment options. Founded by Bipin Preet Singh and Upasana Taku, the company competes with major players like PhonePe, Paytm, Airtel Payments Bank, and Freecharge.

The digital payments firm reported a consolidated total income of Rs 890.3 crore in FY24 compared to Rs 561.6 crore in FY23 and Rs 543.2 crore in FY22. Losses were recorded at Rs 128.16 crore in FY22 and Rs 83.8 crore in FY23; however, it achieved a profit of Rs 14.08 crore for FY24.

SBI Capital Markets and DAM Capital Advisors are managing the book-running lead roles for the IPO. MobiKwik plans to list its equity shares on both the BSE and NSE exchanges.

This strategic move aims to bolster MobiKwik's market position amidst intense competition while leveraging new funds for growth and technological advancements.