Sequoia-backed MobiKwik files DRHP to raise $225m in IPO

India-based mobile wallet service firm MobiKwik filed a Draft Red Herring Prospectus (DRHP) filing for its IPO to raise $255m, becoming the latest Indian startup to explore the public markets.

The firm, which counts Sequoia Capital India, American Express, Cisco and Abu Dhabi Investment Authority among its investors and has raised about $250m to date, plans to offer new shares of up to $201m and sell up to $54m worth of equity shares. It is targeting a valuation of about $1bn in the IPO.

The FinTech firm was valued at $700m in its previous equity funding round in April, when it raised $20m.

The DRHP mentioned that ICICI Securities, BNP Paribas, Credit Suisse, IIFL Securities and Jefferies India Private Limited have been appointed as the book running lead managers and Link Intime India Private Limited has been notified as the registrar of the offer.

“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 the filing of the red herring prospectus with the Registrar of Companies,” the company added.

Detailing the proposed use of funds to be raised via the IPO, the DRHP stated that 40% of the net proceeds will be utilised towards funding organic growth initiatives which will include customer and merchant acquisition and investments in data sciences research and technology to improve their existing products including MobiKwik Wallet, BNPL and Zaakpay.

It will also help the firm to fulfil regulatory capital requirements and maintain minimum capitalisation and net-worth requirements. The rest of the proceeds shall be utilized for growth through strategic acquisitions and for general corporate purposes.

Founded in 2009 by Bipin Preet Singh and Upasana Taku, the firm allows users to pay digitally and also cross-sells a small sachet of insurance and loans as well as provides them with American Express-powered credit cards.

MobiKwik, which has amassed over 101 million registered users and 3.44 million online, offline and billing merchant partners, said its total income for the financial year that ended in March 2021 was about $40.5m, down 18%, while its loss also shrank 12% to $14.9m during the period.

MobiKwik’s move comes as a handful of Indian startups, including Zomato, Nykaa, PolicyBazaar and Paytm, are working to list on stock exchanges. However, 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.”

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