Gurugram based company
Filed its draft IPO papers for Rs 1,900 crore IPO in July, which was approved by market regulator Securities and Exchange Board of India (SEBI) in October. The aim was to launch the offering before the Diwali day of November 4.
Sources aware of the discussions said the fintech firm has been advised not to go ahead with its IPO as it may be difficult to get enough demand from institutional investors (foreign and domestic).
‘Valuations down by 30-40%’
The people mentioned above said, “IPO valuations have come down by 30-40 per cent.”
The disappointing public listing by Paytm has further improved fintech valuations among investors.
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A person with knowledge of the matter said, “There is not enough support from foreign institutional investors for the issue and the company is currently seeing its valuations plummet.
Responding to ET’s email query on the developments, a MobiKwik representative said the company had received regulatory approval for its IPO and would go public at an ‘appropriate time’.
The company did not provide any further details.
Shares of PB Fintech, which runs Policybazaar and Paisabazaar on Monday, also closed at Rs 1,243.10, down 6.60% on the BSE.
strong reaction
in June,
The Abu Dhabi Investment Authority (ADIA) has launched MobiKwik. invested $20 million in Giving it a valuation of $700-$750 million. The startup aims to be listed at a valuation of at least $1 billion. Based on the current talks, it is being said to be too low valuation for the public offering, which existing investors are not in favor of, said people aware of the details.
“The demand for anchor books was low from both foreign and domestic institutional investors, and as a result, public issues had to be postponed,” said one of the people aware of the development.
Anchor investors are allotted shares at a fixed price before the IPO. This is an indicator of the demand and popularity of the IPO.
A banker said the MobiKwik IPO may be delayed by a few months as the company will have to update its September quarter earnings. “As per the rules, the audited accounts should not be more than 135 days old from the date of quarter ending,” he said.
ETtechThe company had also put up a window or pre-IPO placement of shares up to Rs 400 crore, but whether that will happen in the coming weeks is not clear.
Unlike consumer internet firms such as Nykaa and Zomato, which have received a great response from public market investors, fintech companies are facing doubts over their ability to generate revenue and ultimately sell financial services products to their existing user base. has become profitable.
For the year ended March 31, 2021, MobiKwik’s net income declined 18% to Rs 302.2 crore, while the loss widened to Rs 111.3 crore, as shown by the Red Herring Prospectus (DRHP). The firm reported losses of Rs 84.6 crore and Rs 141.8 crore in FY20 and FY19 respectively.
Earlier this year, MobiKwik’s user database was also reportedly breached, but the company denied this at the time. Banking regulator RBI had ordered a probe into the matter.
Subsequent reports indicate that the company has submitted a forensic report about the breach to the RBI.
According to industry estimates, MobiKwik was conducting over one million daily transactions on its network including its digital wallet, UPI and bill payment services at the time of filing the DRHP.
The fintech firm specializes as an online wallet service for payments, cross-selling financial services products such as loans and insurance through tie-ups with financial services firms. The company has recently become an aggregator of mutual funds and small-ticket credit services. MobiKwik has previously stated that it has over 3 million merchants on its network and serves over 107 million users.
According to the draft Red Herring Prospectus (DRHP), MobiKwik founders Bipin Preet Singh and Upasana Taku plan to sell shares worth over Rs 191 crore in the secondary sale. Together, they own more than 34% in the company.
According to startup data platform CrunchBase, MobiKwik has raised more than $165 million to date. This includes equity and debt funding.
Founded in 2009 by Singh and Taku, MobiKwik counts Sequoia Capital India, Bajaj Finance, American Express, Cisco and Abu Dhabi Investment Authority among its investors. Bennett, Coleman & Co Ltd holds 1.08% stake in the startup. BCCL is the parent company of The Times of India Group, which also publishes The Economic Times.