Decoding MobiKwik’s second attempt at public listing

economictimes.indiatimes.com:

MobiKwik on Friday filed draft papers for its initial public offering (IPO) with the stock markets regulator, proposing to raise Rs 700 crore through a fresh issue of shares.

This is the second time One MobiKwik Systems, parent company of the digital payment service provider, has filed its draft papers. MobiKwik had abandoned its initial listing plans in 2021, citing weak market conditions.

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With a user base of around 146 million, MobiKwik is much smaller than its peers Paytm (more than 300 million), PhonePe (500 million) and Freecharge (150 million). But the company wants to build a strong payments and lending business on top of its small but sticky user base. Here’s a quick look at how the company is shaping up its business.

Building a finserv gameplan

MobiKwik leverages its wallet user base to acquire customers for its credit business, which is mostly buy-now-pay-later (BNPL) and small-ticket consumer loans.
“70% of MobiKwik’s loans are of ticket size less than Rs 5,000 segment, compared to industry average (digital disbursals only) of 68% of total volume,” the company noted in its prospectus.

Interestingly, MobiKwik is trying to build a business around these loans at a time when the unsecured consumer lending industry is slowing down under directions from the sector regulator.

Recently, Paytm said it was withdrawing from the risky BNPL segment. ET wrote that large non-bank financial companies (NBFCs) like Aditya Birla Finance are slowing down