MobiKwik Secures Debt Funding Ahead of IPO, Reduces Fundraising Target

Preeti Bali / 9:08 am / April 1, 2024

Gurugram-based fintech company MobiKwik is taking steps towards its upcoming initial public offering (IPO). The company has secured Rs 50 crore in debt financing from BlackSoil Capital through the issuance of non-convertible debentures (NCDs), according to media reports.

Issuing NCDs to Bolster IPO Preparations

MobiKwik’s board approved a special resolution to issue 1,000 NCDs, each with a face value of Rs 5 lakh, to raise Rs 50 crore. This information was reported by Entracker, citing data obtained from the Registrar of Companies (RoC). This strategic debt financing aligns with MobiKwik’s plan to raise Rs 700 crore through its IPO, with no offer-for-sale component, as per the revised draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI).

Revised IPO Target Reflects Market Conditions

The current fundraising target represents a significant reduction from MobiKwik’s initial IPO filing in 2021, which sought to raise Rs 1,900 crore. This revision reflects potential adjustments based on prevailing market conditions.

Exploring Additional Pre-IPO Funding Options

MobiKwik has also indicated its intention to discuss with its book-running lead managers the possibility of raising an additional Rs 140 crore through pre-IPO placements. These placements could involve methods such as private placements, preferential allotments, or rights issues. The final structure of the pre-IPO fundraising will be determined, and the size of the fresh issue from the IPO may be adjusted accordingly.

Debt Funding Marks Another Milestone

The recent debt financing from BlackSoil Capital signifies another important step in MobiKwik’s fundraising journey. Since August 2022, the company has secured a total of Rs 55 crore in debt funding. This includes separate debt rounds with BlackSoil and Bengaluru-based alternative investment fund Karnation, as evidenced by filings with the RoC. In these earlier rounds, MobiKwik issued a total of 900 NCDs to BlackSoil in two tranches, amounting to Rs 35 crore and Rs 10 crore, respectively.

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