Indian payments platform Mobikwik gets approval for IPO, raises nearly $600 million: what platforms are available for three-way payments in India

Mobikwik Systems Ltd, an online payments company, received approval for its initial public offering (IPO) from the market regulator, the Securities and Exchange Board of India (Sebi), on Monday. The company plans to raise INR 7 billion (about Rs 591 million) through stake sale.

As per the draft IPO prospectus, the issue will be entirely in the form of fresh issue of equity shares of face value of INR 2 each, excluding the sale of shares (OFS) component. The company said, "The net proceeds of the issue will be utilised to support the growth of financial services; expansion of payment services; investments in data, machine learning, artificial intelligence, and product and technology development; capital expenditure in the payment equipment business; and general corporate purposes."

Mobikwik was founded by Bipin Preet Singh and Upasana Taku, two founders with extensive experience in technology development and financial product design.Mobikwick offers a wide range of payment and financial services to businesses and merchants.

The company's flagship app (Mobikwick) offers consumers a wide range of payment options and financial products, including digital credit, investments and insurance. It operates B2B payment gateways for e-commerce businesses and has received approval from the Reserve Bank of India (RBI) for its Payment Aggregator (PA) business through its subsidiary Zaakpay.

The Company has reserved 751 TP3T of the net issue for qualified institutional investors and non-institutional investors will receive 151 TP3T. The remaining 101 TP3T of common shares will be allocated to retail investors participating in the offering.

SBI Capital Markets and DAM Capital Advisors acted as bookrunners for the IPO, while Link Intime India acted as the registrar. The company plans to list on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE).

Mobikwick plans to use INR2bn to expand its financial services division, INR1.35bn to drive growth in payment services and another INR1.35bn for investments in data, machine learning and AI innovation. The remaining INR702.8 million will be used for capital expenditure in the payment equipment business and general corporate purposes.

The company turned profitable in FY2024, reporting a net profit of INR141 million, a significant turnaround from a loss of INR838 million in FY2023. Revenues also grew significantly, reaching INR875 million in FY2024 as compared to INR540 million in the previous year.

In addition, the company operates a B2B payment gateway for e-commerce businesses through its subsidiary Zaakpay, which has also received approval from the Reserve Bank of India (RBI) for its Payment Aggregator (PA) business.

As of 30 September 2023, Mobikwick has registered 146.94 million users and supports 3.8 million merchants to process online and offline payments. Payments GMV is growing at a CAGR of 32.331 TP3T, while MobiKwick ZIP GMV (spend) surged by 354.861 TP3T from FY2021 to FY2023.