Mobikwik expects to double revenue this fiscal, stays cautious on IPO launch

IPO-bound fintech firm MobiKwik is expecting to close the current financial year with 100 percent revenue growth, a top company official said.

Mobikwik Chairperson and COO Upasana Taku said the company's initial public offer (IPO) is a monumental opportunity for the company and will not like to hit the market when it is behaving erratically but wait for the market condition to stabilise.

The company, which posted a narrowing of loss to Rs 111.3 crore and revenue of Rs 302.25 crore in the financial year 2021, expects to double the revenue by the end of current financial year.

Talking about the company's path to profitability, she did not mention any definite timeline but said if the company is able to increase revenue and keep control on the cost then losses can be covered over in a few quarters.

"In just two quarters we have already achieved the revenue number of last year. Any investor can calculate what will be business performance for the full year. It will look like that the company has doubled the revenue and EBITDA losses are the same or lower. If you have crossed Rs 300 crore till Diwali, then you have a clue on where you are going to land," Upasana said.

She said MobiKwik has been doubling revenue every year since the last four years and has been controlling losses.

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The COVID impact

The company in its draft document for IPO mentioned that it was hit by the COVID-19 pandemic and the BNPL (Buy Now Pay Later) segment gross merchandise value decreased by 38.22 per cent to Rs 299.94 crore in 2020-21 from Rs 4,85.49 crore in 2019-20.

Upasana said the business has now crossed to pre-COVID levels and the company has had good performance during the current financial year.

"Our BNPL business has grown 22X compared to last year and the payments business has grown 3X," she said.

The company plans to raise Rs 1,500 crore from the IPO.

When asked about the timelines for the launch of IPO, Upasana said the company has permission to hit the market till November 2022 and it will go for listing once market conditions become stable.

"I think that it is common sense that if the markets are acting erratically then why do you want to risk the outcome of something for which you worked so hard? We have been working very hard for the last 12 years to get to this stage. I cannot think of any internet company which has reached over 10 crore users, having spent only Rs 700 crore. We have reached this stage after hard work so the IPO should be a bumper. We will fight for this only," she said.

Mobikwik's competitor in the payments segments, Paytm's shares hit an all time low of Rs 952.95 and closed at Rs 959.90 apiece on Friday. The closing price of Paytm shares was about 55 per cent lower than the subscription price of Rs 2,150 apiece.

Paytm's Founder Vijay Shekhar Sharma during a webinar last week said shares of global peers of the company declined in the range of 38-51 percent in the last six months and South American firms have seen up to 70 percent dip.

Upasana said MobiKwik will wait for the market to become stable for the IPO and till that time will communicate to people about the company's capital efficiency and other unique selling propositions.