Mobikwik files DRHP to raise Rs 1,900 crore via IPO

Bengaluru|Mumbai: Digital payments startup Mobikwik on Monday filed a draft red herring prospectus (DRHP) with capital markets regulator, Securities and Exchange Board of India, to raise Rs 1,900 crore ($255 million) through an initial public offering.

The DRHP, which ET has seen, showed that about Rs 1,500 crore would be raised through a primary share sale, while the remaining will be a secondary transaction where existing investors will sell stakes. ET on July 10 reported Mobikwik was close to filing its DRHP for an issue size of $250-300 million.

The firm, founded in 2009 by Bipin Preet Singh and Upasana Taku, counts Sequoia Capital India, Bajaj Finance, American Express, Cisco and Abu Dhabi Investment Authority among its investors.


According to the DRHP, Singh and Taku plan to sell shares worth over Rs 191 crore in the secondary sale.

Eyeing $1 B Valuation
The two founders together own 34.5% in Mobikwik. Sequoia Capital India and Bajaj Finance are looking to sell shares worth around Rs 95 crore and Rs 69 crore, respectively. The rest of the investors also plan to sell stakes as part of the offer for sale.

The Gurgaon-based startup — which was valued at $700 million in its previous equity funding round in April, when it raised Rs 150 crore ($20 million) — is eyeing a valuation of $1 billion (Rs 7,459 crore) at its public market listing, sources aware of the matter said.

A spokesperson for Mobikwik could not immediately be reached for comments.

The 12-year-old startup joins a growing list of consumer internet firms, including Zomato, Paytm, Nykaa and PolicyBazaar that are eyeing stock market debuts this year.

Unlike startups like Zomato and Paytm that are planning to launch their IPOs as a ‘publicly managed company’, Mobikwik said in the DRHP that it will list it as a "professionally managed company."

Bajaj Finance owns 13.8%, while Sequoia Capital India has a 17.2% stake. Bennett, Coleman and Company Ltd has a 1.08% stake in the startup. BCCL is the parent company of The Times of India Group, which also publishes The Economic Times.

“Our board has authorised the offer and the fresh issue... Our shareholders have authorised the offer pursuant to their resolution dated July 7,” Mobikwik said in the draft prospectus.

“Our company, in consultation with the book running lead managers, may consider a pre-IPO placement of such number of equity shares for cash consideration aggregating up to Rs 400 crore, at its discretion, prior to filing of the red herring prospectus with the Registrar of Companies,” the company added.

Also Read: How Zomato's cap table has evolved

Numbers Count
Mobikwik has so far raised over $165 million, according to startup data platform Crunchbase. This includes equity and debt funding.

For the year ended March 31, Mobikwik’s total income was down 18% to Rs 302.2 crore while losses widened to Rs 111.3 crore, the DRHP showed. The firm reported a loss of Rs 84.6 crore and Rs 141.8 crore, respectively, in FY20 and FY19.

On its recent data breach, Mobikwik said it had “submitted its reply to such communication from RBI, including undertaking to resolve any pending IT issues within a stipulated period.”

The startup specialises as an online wallet service for payments, cross-selling financial services products such as loans and insurance through tie-ups with financial services firms. It recently became an aggregator of mutual funds and small-ticket credit services. Mobikwik has previously said it has over three million merchants on its network and serves over 107 million users.