MobiKwik Puts Off its Rs.1,900 crore IPO After Paytm Scare

The weak listing of the Paytm IPO may have had its first casualty in the form of a digital IPO being put off. MobiKwik has put off its proposed Rs.1,900 crore IPO on the back of weak Paytm listing.

MobiKwik has been apprehensive that the post listing performance of Paytm would impact the valuations of digital IPOs and also post listing performance. Hence, MobiKwik has decided to put off its IPO plans till further notice.

It must be remembered that the DRHP filed by MobiKwik with SEBI had already been approved. Technically, MobiKwik was all set to go ahead with the IPO. MobiKwik is into the Buy Now Pay Later (BNPL) segment and wallet business and its business model broadly corresponds with that of Paytm.

It is anticipated that the performance of Paytm post listing may have created apprehensions about the response of retail, HNI and QIB investors.

Check - Paytm IPO - Listing Day 1 Performance

First, a bit of the Paytm story. The IPO was priced at the upper end of the price band of Rs.2,150 per share despite the subscription being a nominal 1.89 times. On 18th November, when Paytm listed, it opened weak but consistently lost value to close nearly 27% below the IPO price.

By the close of trading on 22nd November, Paytm touched a low of Rs.1,271 but bounced to close on 22-Nov almost 36% below the IPO price.

However, the stock has rebounded in the next couple of days. Between 23-Nov and 24-Nov Paytm recovered nearly 34% from the lows to scale above Rs.1,700. It is still well below the IPO price of Rs.2,150, but the recovery has been sharp and encouraging.

In this light, the decision by MobiKwik to postpone the public issue may appear to have been taken in haste. After all, the interest in digital IPOs continues to persist.

While time lines are not mentioned, the founder of MobiKwik has indicated that they may look to postpone the IPO by 2-3 months. MobiKwik was seeking valuation of $1 billion through the IPO and apparently, it also has second thoughts on the same. MobiKwik counts among its investors marquee names like Sequoia, Bajaj Finance, American Express and Bennett Coleman.

While both Paytm and MobiKwik are in the wallet and BNPL business, Paytm is a much larger ecosystem with over 33 crore customers and over 2.2 crore merchants.

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