Mobikwik defers its Rs 1,900 cr IPO, says will list at 'the right time'

IPO was slated for November; source are now saying the company may go for a listing in 2022

Payments firm MobiKwik has pushed back its plan of a public listing to a later date. The company that had received Sebi clearance for its listing on October 7, had initially planned to list in November.

MobiKwik, whose business model is similar to fintech player Paytm, had filed its paper to raise Rs 1,900 crore via an initial public offering (IPO).

When contacted the company declined to comment directly on the delaying of its IPO plans but in an official statement said: “The company is witnessing a strong business growth, has a clear path to profitability and will list at the right time.”

Sources in the know are now saying that the company may go for a listing in 2022.

MobiKwik has a user base of 101 million (as of March 31, 2021). “The company is focused on Buy Now Pay Later (BNPL) for daily life payments and has the largest number of pre-approved BNPL users in India at 22.3 million (as of March 2021). It has always adopted a sustainable growth strategy,” said a statement from MobiKwik.

After Paytm’s IPO fiasco, many investors and market sources believed that MobiKwik’s delay in listing could be due to the way Paytm’s IPO debuted. Paytm’s shares plummeted by almost 27 per cent on the day it got listed. Today, since the listing, Paytm’s share price was up 10 per cent during intraday compared to last close. Paytm’s share closed at Rs 1,494.95 per share up 9.90 compared to previous close of Rs 1,360.30 per share.

However, media reports also pointed out to the recent changes made by the Reserve Bank of India around digital lending, which could well be one of the reasons for investors cautious approach towards MobiKwik.

According to the RBI’s working group recommendation, “to prevent loan origination by unregulated entities, REs (regulated entities) should not be allowed to extend any arrangement involving a synthetic structure, such as, the FLDG (First Loss Default Guarantee) to such entities. REs should not allow their balance sheets to be used by unregulated entities in any form to assume credit risk.”

MobiKwik is a major player in the buy-now-pay-later segment with 22.3 million users.

In the last round of funding, Mobikwik had raised about $20 million from Abu Dhabi Investment Authority (ADIA) in June of this year, commanding a valuation of about $750 million.

As per its DRHP, the fintech posted losses of Rs 111.3 crore as of FY21, Rs 99 crore as of FY20 and Rs 147.9 crore as of FY19.