Mobikwik founder says they are not selling any shares in the IPO
- “I am told that it’s a positive signal that promoters are so gungho about their business that they don’t want to sell at the current issue,” cofounder Upasana Taku said.
- Other stakeholders may choose to increase or decrease their offer for sale (OfS), cofounder Taku said.
- The company is betting big on its two BNPL products in order to further strengthen its financial position.
AdvertisementThe promoters of digital payments company Mobikwik — Upasana Taku and Bipin Preet Singh — have decided to not sell any shares in the company’s upcoming initial public offering (IPO).
Meanwhile, other stakeholders may choose to increase or decrease their offer for sale (OfS). “I can’t speak on behalf of my shareholders, they can also reduce or increase how much they want to sell (during the IPO). I can speak for myself and one of my co-founders, who is also my husband,” cofounder Taku told Business Insider.
Source: Mobikwik DRHP*
|As per DRHP||Details|
|Total stake held by founders (collectively)||35% worth ₹2,656 crore*|
|Earlier plan to sell during IPO||7% of their stake worth ₹188 crore|
|Now||Not sharing any shares|
The worth of shareholding of Mobikwik’s founders have been derived based on the $1 billion (₹ 7,591 crore) valuation accorded to the company in October 2021.
She emphasised that the promoters have larger shareholding in the company; Singh has 20% and Taku has 14%. “I am told that it’s a positive signal that promoters are so gungho about their business that they don’t want to sell at the current issue,” she said, adding that the promoters may look to sell a small portion of their shareholding later.
|Other Investors looking to offload their shareholdings in MobiKwik IPO|
|Stakeholders||Offer for Sale (OFS)|
|American Express||₹9.9 crore|
|Bajaj Finance||₹68.9 crore|
|Bipin Preet Singh||₹111 crore|
|Upasana Taku||₹78 crore|
|Cisco Systems||₹11 crore|
|Sequoia Capital||₹94 crore|
|Treeline Asia||₹24 crore|
Source: Mobikwik’s DRHP
Mobikwik is just working to get the timing right
Mobikwik has already got market regulator, Securities and Exchange Board of India’s (SEBI), permission to go for an IPO in November. However, the company has decided to wait out due to unfavourable market conditions. A company has to go public within the next 12 months of receiving SEBI’s approval.
While Mobikwik has not yet decided or disclosed when it plans to go public, Taku had emphasised that a strong financial performance, regulatory approval and market are the most important aspects of going public. Financial performance and regulatory approval is still somewhat in control of the company, but market sentiment is not.
One has to “time the market right” before making any move towards that direction, she added.
Several experts have suggested that Paytm’s underwhelming debut in the stock market has raised concerns for other startups, specifically, fintech going public in India.
Paytm’s share price dropped 40% on the first two days of listing last month. Its share price still has not reached close to the issue price of ₹2150, which is why companies like OYO and Mobikwik are said to be shying away from IPO now. As per a Bloomberg report, Mobikwik’s shares had dropped 40% in the grey market on the second day of Paytm listing.
Mobikwik is not only competing with startups or fintech companies, but it also faces challenges from large public issues like the LIC that would eat into liquidity.
The trust is that the issue of size is going to attract big investors across the board. The chances of an IPO like LIC eating into the liquidity are quite high as more investors look to place their bets on it.
The company highlighted that they will do an IPO next year before November, however the month has not been specified.
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