In a strategic move ahead of its planned Initial Public Offering (IPO), MobiKwik, a leading fintech firm, has successfully secured Rs 50 crore in debt funding from BlackSoil Capital. This marks the second instance of debt funding from the same investor within two years, underscoring investor confidence in the Gurugram-based company’s potential.

MobiKwik’s board ratified the decision through a special resolution to issue 1,000 Non-Convertible Debentures (NCDs) at an issue price of Rs 5,00,000 each, as revealed in regulatory filings obtained from the Registrar of Companies (RoC).

Recently, MobiKwik took steps towards its IPO ambitions by filing a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), with plans to raise Rs 700 crore. However, industry insiders suggest that the company might reassess its public listing strategy in light of challenges faced by industry peer Paytm.

According to the company’s latest DRHP, a significant portion of the IPO proceeds, Rs 250 crore, is earmarked for bolstering its financial services business. Additionally, Rs 135 crore is allocated towards fueling the growth of its payment services division, while another Rs 135 crore is designated for enhancing product offerings and technology infrastructure.

Despite facing headwinds in the competitive fintech landscape, MobiKwik demonstrated resilience by turning profitable in the first half of FY24, registering profits of Rs 9.5 crore alongside an operating revenue of Rs 381 crore. However, the company experienced a modest 2.37% growth in operating income in FY23, reaching Rs 539 crore. MobiKwik managed to curtail its losses, which amounted to Rs 83.8 crore in FY23, marking a notable 34% reduction from Rs 128 crore in the preceding fiscal year.

As MobiKwik navigates the complexities of the fintech market and prepares for its IPO, securing debt funding is a strategic manoeuvre to fortify its financial position and pursue growth opportunities amidst evolving industry dynamics.