MobiKwik to Double Revenues in FY22, IPO Date Uncertain
One of India’s leading players in the digital payments, digital wallets and BNPL (buy now pay later) segment, has announced that it would be doubling its revenues for the financial year ending March 2022. In the last 4 years, the company has consistently doubled its revenues each year. Despite that, the losses will continue despite narrowing consistently.
However, not much was revealed about its plans for the proposed IPO. MobiKwik was scheduled to come out with the IPO around November but decided to postpone the issue after the weak post-listing performance of Paytm. In fact, the MobiKwik CEO had squarely blamed Paytm as the reason for MobiKwik putting off its IPO plans. For now, it does look unlikely that they would take up the IPO in the current fiscal.
In the last few weeks, most of the digital IPOs have taken deep cuts. Already CarTrade and Paytm have lost more than 55% from their IPO price. Policybazaar has dipped well below its IPO price and successful IPOs like Nykaa and Zomato also saw their respective market capitalizations fall well below the Rs.1 trillion mark. In such a situation, MobiKwik does not see too much of a point in going ahead with its IPO plans.
The CEO of MobiKwik, Upasana Taku, has confirmed that their revenues in the first two quarters of FY22 had crossed the full year revenues of FY21, giving hopes that full year revenues would easily double over last year. Despite higher revenues, the management expects MobiKwik to report EBITDA losses which will be flat or lower on YoY basis.
In FY21, the company had taken a hit on its BNPL business and also on its overall gross merchandise value (GMV). In FY21, the GMV had fallen 38.2% on YoY basis and that is not a good signal for a digital company as it is the core factor that is seen as the harbinger of top line growth. However, the GMV has picked up back to pre-COVID levels in FY22.
The company had postponed its plans for its Rs.1,500 crore IPO and would like to take a call before November 2022 about the timing. The MobiKwik IPO approval is valid till November 2022. MobiKwik already has over 10 crore users and it has been achieved with limited cash burn. That is what MobiKwik is counting on as its unique selling proposition.
However, it would need to show more traction on the top line in an industry that is obsessed with top line. But for now, MobiKwik would prefer to wait for normalcy to return to these markets.
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