MobiKwik Stays Strong Amidst Uncertainty of the IPO
In spite of the uncertainty around its IPO, MobiKwik has raised INR 55 Cr in debt. The fintech startup raised the money from BlackSoil Capital and India Credit Fund, and Karnation bought 200 NCDs with a face value of INR 10 Lakh each. This gives MobiKwik a debt of INR 10 Cr. A few months earlier, MobiKwik’s chair and COO said the company was seeking $100 million from investors. However, the uncertainty around the company’s IPO may have led to some hesitation on the part of potential investors.
MobiKwik has reportedly raised INR 45 Cr from BlockSoil’s subsidiaries BlackSoil Capital and BlackSoil India Credit Fund. The startup’s board of directors approved 900 INR 5 Lakh NCDs for the VC giant in August. The board also approved a plan to give Karnation 200 NCDs with a face value of INR 10 lakh each in September.
NCDs are fixed-payment debentures which cannot be converted as stocks or shares. If an employee leaves MobiKwik, their options will be treated differently depending on whether the company is listed or not. This change protects the interests of option holders.
Employees who have retired can use their ESOPs within six months if the company is publicly traded. With the new change, the Nominations and the Remuneration Committee can break the rule in certain situations.
If the company does not get listed, employees have three years from their last day of employment or six months from the listing to exercise their stock options.
The MobiKwik board has also reappointed payments business head Chandan Joshi as the startup director. MobiKwik is reportedly seeking $100 million in investment but has only raised $6.7 million so far. No one knows for sure if the company will be able to get the extra money it needs.
Indian startup funding has seen a surge in recent months as companies struggle to secure funds. The decline in investment activity is being attributed to the funding winter, where many startups have had to put their growth plans on hold due to a lack of available capital. Others, on the other hand, have had to make cuts to stay in business, and layoffs are becoming more common.
Even though its approval from the SEBI to do so expires later this month, MobiKwik is still planning to list its shares on the BSE. The company plans to raise up to 1,900 crore rupees through the IPO, including a new share issue of up to 1,500 crore rupees and a sale of up to 400 crore rupees.
Many new tech startup stocks have put their plans to list on hold or experienced significant delays due to market volatility. The prices of these stocks have fallen by 40–60% from their record last year. The biggest loss was suffered by Mobikwik, founded by Mr. Bipin Preet Singh and Mr. Taku in 2009. It offers credit, insurance, gold loans, and mobile recharges.
The startup has raised $20 million from the Abu Dhabi Investment Authority. In October last year, a few employees used their employee stock option plans to join the unicorn club. At the time, it was worth between $1.5 billion and $1.7 billion.
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