Fintech platform Mobikwik opened for subscription on December 11, and it will close on December 13. The company aims to raise Rs 572 crore through the IPO. Further, the price brand per share is Rs 265 and Rs 279.
On the first day, the IPO was subscribed 24.20 times by retail investors and 6.91 times by non-institutional investors. Speaking about expectations from the IPO, Mobikwik CEO Bipin Preet Singh said that this is a crucial milestone for the company, and he hopes that investors show their support.
Singh talked with Outlook Business about the company’s IPO journey, profitability in the fintech sector, the importance of complying with regulations, and more
Could you shed some light on your IPO journey, especially considering you planned to go public in 2021 and later withdrew your application?
Actually, it's not correct to say that we withdrew our papers. We filed in 2021 with plans to go public, but at that time, the public markets were going through changes. Some major IPOs launched around that period didn't perform well, so we decided to focus on building and scaling the business first. Since then, we've grown significantly—from Rs 300 crore in 2021 to Rs 890 crore in revenue last year, with a profit of around Rs 14 crore. We've become a profitable business, tripling in size, which is why we've now returned to the public markets.
Regarding profitability, while you posted a profit of Rs 14.08 crore in FY 24, there was also a loss of Rs 6.6 crore in Q1 of FY 25. On that note, how does the company plan to drive growth and profitability as it moves forward with its IPO?
Regarding the Q1 results, I think it’s inaccurate to describe the loss as significant. It’s important to note that we are still profitable this quarter, but the additional debt we’ve taken on, along with the interest payments, has made the EBITDA to PAT figure appear negative. The loss is only Rs 6 crore, which, given our Rs 345 crore in revenue, represents substantial growth compared to last year. For context, we did only Rs 300 crore in six months last year. Our focus is to reinvest all our margins into growth, and that’s exactly what we are doing.
We aim to continue growing, but we won’t do so by burning cash. This is the strategy we’re committed to. We’ve shown that it’s possible for fintech companies to make a profit. In our industry, I don’t think any player has consistently made a profit, but we’ve had one full year of profitability, and this year’s performance is also positive, though slightly lower. This gives me confidence that if we continue providing the right solutions to our customers, significant growth is achievable without burning cash.
I have confidence that if we provide the right solutions to our customers, significant growth is possible without the need to burn cash. What has happened with many companies is that they gained access to a lot of capital, burned through it, and ended up in negative territory because they had too much cash and capital. In contrast, Mobikwik has raised only Rs 1,200 crore over the last 15 years, so we’ve been very careful in how we build our business. This approach has allowed us to focus on creating value and refining our pricing strategy.
We raised our last private round at a valuation of around Rs 5,000 crore in 2019, which reflects our thoughtful approach. If you look at the market’s experience with fintech IPOs, it hasn't been very positive. Therefore, we wanted to ensure that we leave value on the table for investors. We want to rebuild trust and show the market that fintech is a significant and profitable sector.
One interesting aspect about your IPO is that it does not include an offer for sale. Why so?
This decision reflects the fact that, as promoters, we are the largest shareholders, and even other large shareholders are not selling. They believe in the company’s potential and are confident in its future success, which is why they are holding on to their shares.
In the past we have seen fintech companies facing regulatory hurdles and have come under the scanner of the RBI. Recently former RBI governor Shaktikanta Das also said that fintechs need to balance innovation with prudence. On that note, could you shed some light on how you comply with regulations while maintaining innovation?
While I cannot go into the details of every aspect, this is the guiding principle that MobiQuick follows. We firmly believe that fintech is not about growth at any cost. It’s about using technology to solve customer problems.
At the same time, when a customer uses your app or any fintech solution, trust is the most important factor. Retaining and growing that trust is crucial, which is why compliance is taken very seriously at MobiQuick. We have maintained a clean track record in this regard.
The middle class and rural India have been a major customer base for you. Your loan ticket size has been relatively small. On that note, is the small loan size and potential increase in defaults a concern?
It’s not necessarily a worry, as it largely depends on how the credit underwriting process is managed. As you know, MobiQuick is not in the business of lending directly. What we do is approach lenders to understand exactly what they want to distribute—whether it's small-ticket loans or high-ticket loans, to merchants or consumers, secured or unsecured. Based on the customer need, we create the end-to-end journey. I don't believe that either small-ticket or high-ticket loans are inherently risky. The key focus should be on the quality of underwriting and the compliance measures in place.
