A Gurugram based fintech startup Mobikwik, which was planning to go public this year, may defer its plan by two or three months or even more.
The official news of the delayed IPO comes just after Paytm’s gloomy market debut that saw its shares have gone down by 28% or more.
Seeing the current situation in the primary market, the fintech company has been advised to not go ahead with its IPO as it may face difficulties to find right investors both foreign and domestic.
Mobikwik, a small fintech startup compared to Paytm, had submitted its DRHP to SEBI for the SME-IPO in July. This includes a fresh issue of equity of Rs 1500 Crores and an OFfer for Sale (OFS) for another 400 crores.
What was the original plan?
The company had plans to hit the markets around Diwali and to raise Rs 1900 Crores approx by issuing its shares to the public. However, the financial advisors had advised the company to wait for the response to Paytm. Also, they suggested not to proceed with the SME-IPO launching, because of the shortening of demand from overseas investors.
After Paytm’s debacle, the company is not in a mood to go ahead before January – February 2022.
The firm might have the option to go to the markets in December in case the investors’ reaction is good, if not, the plans might get delayed again.
Paytm’s oxymoron listing and proceeding with underperformance, played a vital role in the decision to postpone the IPO plans.
MobiKwik’s unlisted stock was trading at around Rs 1,350 before the launch of Paytm’s IPO. From that point, the unlisted share price has decreased to about Rs 900, right around 33% lower, according to reports.
MobiKwik has an extraordinary DNA – it was bootstrapped for the initial 4 years and has accomplished its present size of 101 million clients (as of March 2021) having spent just $100 million since its inception.
The fintech startup mainly focuses on Buy Now Pay Later (BNPL) for day to day payments and has the biggest number of pre-supported BNPL users in India at 22.3 million (as of March 2021).
It has consistently adopted a sustainable growth strategy. The organization is seeing solid business development, has a way to productivity and will list at the right time – MobiKwik said according to a report.
Reasons Behind the Fall in the Company Valuations
As Paytm IPO was released with negative reviews, FinTechs have endured the shot and valuations of Mobikwik shares went further downhill by around 30-40 percent.
Indeed, even the retail financial investors are somewhat terrified since the Paytm IPO has drawn down their capital by approx 30%.
In June, the Abu Dhabi Investment Authority put $20 million in MobiKwik, which provided it with a valuation of about $700-750 million. Since the IPO launching, they had been planning to raise a valuation of more than $1 billion. However the reports say that the current financial investors are not in the mood for a public offering.
The interest for anchor books was repressed both from FIIS and domestic financial investors. This could bring about the delaying of the Mobikwik IPO shares. The more demand among anchor financial investors shows the willingness for financial investors to apply for a specific IPO.
A Sneak Peak into Mobikwik
Mobikwik is one of the biggest portable wallets (MobiKwik Wallet) and Buy Now Pay Later (BNPL) players in India dependent on mobile wallet wallet GMV and BNPL GMV, separately, in Fiscal 2021, its DRHP said.
In March, reports recommended that information of almost 110 million clients of MobiKwik was leaked on the dark web available to be purchased by programmers. The dataset included details of KYC documents, Aadhaar cards, Mastercard subtleties, cell phone numbers connected to MobiKwik wallet, and so forth.
The organization, in any case, had denied such information. Resulting reports in October also recommended that this supposed information breach of 3.5 million users at MobiKwik is presently under RBI’s scanner.
Online wallet firm MobiKwik allows its users to make and get payments across different financial services like loans and insurance protection. It additionally has tie-ups with different monetary firms.
Also, it has been seen that, during the hour of filing DRHP with the SEBI, MobiKwik had a record of conducting nearly 10 Lakh every day transactions on its platform.
Till now, the fintech startup has not published its quarterly monetary outcomes for the Q2 of FY 2021-22. This shows the willingness of the organization to give Mobikwik IPO shares because the evaluated FS of the new quarter should be distributed before somewhere around 135 days after the end of the quarter.
The organization has saved a hole or pre IPO placements for its shares worth up to Rs 400 crore. MobiKwik’s promoters like Upasana Taku, and Bipin Preet Singh, have intended to sell part of their shares in the organization’s secondary market according to the papers documented with SEBI.
Like Zomato and Nykaa, numerous different organizations are grappling to produce enough revenue just to legitimize their existence.