MobiKwik IPO Opens on December 11; Key Financials to Consider

One MobiKwik Systems Limited IPO (MobiKwik IPO) will be open for subscription from December 11, 2024, to December 13, 2024. The IPO is a book-built issue valued at ₹572.00 crores, consisting entirely of a fresh issue of 2.05 crore shares.

The price band for the MobiKwik IPO is set between ₹265 and ₹279 per share, with a minimum lot size of 53 shares. Retail investors will need to invest a minimum amount of ₹14,787.

The company plans to use the net proceeds for the following purposes:

• Expanding its financial services business
• Growing its payment services business
• Investing in data, machine learning (ML), artificial intelligence (AI), products, and technology
• Capital expenditure for the payment devices business
• General corporate purposes.

Before deciding to subscribe to the MobiKwik IPO, it’s crucial to examine the company’s key financial results to better understand its performance and growth potential.

MobiKwik Financial Performance

Revenue Breakdown

The company offers financial services and payment services.

Payment Services

The payment services segment offers a variety of products and solutions, including a merchant payment ecosystem, recharge and bill payments, credit card bill payments, and the UPI ecosystem. Additionally, it provides products like MobiKwik ZIP, a 30-day product, and MobiKwik ZIP EMI, which offers a repayment term between 3 to 24 months. The company also provides Merchant Cash Advances with similar repayment terms.

The revenue model for Payment Services includes merchant fees, convenience fees from users, and various other charges such as late payment fees and penal charges.

The key revenue drivers for this segment include the number of registered and new users, the total payment GMV (Gross Merchandise Value), the payment mix (credit card, UPI, debit card, wallet, etc.), and activated users. The percentage of repeat users and the volume of digital credit GMV, along with the average ticket size, are also crucial for driving revenue growth.

For the three months ended June 30, 2024, the revenue from Payment Services was ₹1,715.41 million. In Fiscal 2024, the total revenue from Payment Services reached ₹3,171.21 million, a notable increase from ₹2,544.46 million in Fiscal 2023, but lower than the ₹4,289.08 million in Fiscal 2022.

Financial Services

In the Financial Services segment, the offerings include a range of digital credit products, such as MobiKwik ZIP and Merchant Cash Advances, similar to the payment services but with a focus on providing credit solutions for both consumers and merchants.

The revenue model for Financial Services includes merchant fees, one-time activation fees, late payment fees, penal charges, and sourcing and collection fees. Revenue drivers for this segment are the number of activated users, the percentage of repeat users, digital credit GMV, and the average ticket size, which contribute to a growing and sustainable revenue stream.

For the period ending June 30, 2024, the revenue from operations in Financial Services amounted to ₹1,707.26 million, accounting for 49.88% of the total revenue from operations. In Fiscal 2024, the company reported a significant increase, with financial services revenue reaching ₹5,578.82 million, which represented 63.76% of total revenue. This is a marked improvement compared to Fiscal 2023, where the financial services segment contributed ₹2,850.21 million, or 52.83%, and Fiscal 2022, when it stood at ₹976.57 million, making up 18.55% of total revenue.

About One MobiKwik Systems Limited

MobiKwik aims to drive financial inclusion for India’s underserved population by leveraging technology as a key enabler. At its core, the company operates as a platform business with a two-sided payments network, connecting consumers and merchants. As of June 30, 2024, the company has onboarded 161.03 million registered users and enabled 4.26 million merchants to process online and offline payments.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.