It's A Myth That Payment Companies Don't Make Money, Says Mobikwik CEO

Mobikwik CEO Bipin Preet Singh on Wednesday suggested that all payments should be processed through a wallet, instead of bank accounts. The fintech company which opened for public subscription today, becomes a differentiator from other competitors due to its use of digital wallets, he said.

Speaking at an event in New Delhi, Singh highlighted that the registered user growth has increased consistently with 161.03 million registered users as of June 30, 2024. With regards to making money in the fintech space, he said that the company charges a MDR (Merchant Discount Rate) to the merchants.

The founder also talked about the company's distribution business. "Some of the products in this segment include Zip (buy now pay later). This flagship product has seen an increase in demand with around 6 million customers signing for the same," he said.

Singh also spoke about the risks of unsecured lending, calling it "seasonal". "Being a distributor, we work with all lenders and customers. Further, we are fairly bullish on lending as a whole in future," he added.

The company reported a net profit of Rs 14.08 crore in FY24. However it posted a loss of Rs 6.6 crore in Q1FY25. Mobikwik IPO opened for subscription today (December 11) and it will close on December 13.

While the exact date is not known, shares of the fintech major will be listed on the NSE and BSE around December 18. The price band of the IPO is around Rs 265–Rs 279 per share, and the minimum lot for the same is 53 shares. With the IPO, the company aims to raise around Rs 572 crore.

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The offering will comprise of fresh equity of around 2.05 crore equity shares. At the grey market premium, the shares of the company was around Rs 125-130. This was a 45 per cent premium over the issue price.

MobiKwik IPO Subscription Status

Within the first hour of its opening, the IPO got fully subscribed. The subscription bid for retail individual investors was 8.13 times while that of non-institutional investors was 1.83 times.

Ahead of the IPO, the fintech company raised Rs 257 crore from anchor investors. With regards to subscription of the IPO, some brokerages have recommended a long term subscription. Bajaj Broking's analysts have mentioned that the IPO can be subscribed keeping a long term view.

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"Numerous and evolving cybersecurity threats, including social engineering schemes, the introduction of computer viruses or other malware, and the physical destruction of all or portions of information technology and infrastructure and those of third parties with whom company partner could compromise the confidentiality," analysts said.

Further, the strength of the company comprises the trust in the brand, effective operational management, and its product-first approach to businesses.