ONE MOBIKWIK SYSTEMS LIMITED
ABOUT THE COMPANY
Mobikwik is a fintech company - one of the largest mobile wallets and one of the largest Buy Now Pay Later (BNPL) players in India. Digitally paying users have been rapidly growing in India in the last decade, but the credit card penetration in the country is still only 3.5%. They are focused on addressing the unmet credit needs of the fast-growing digitally paying users by combining the convenience of everyday mobile payments with the benefits of BNPL.
Founded in 2009 by Bipin Preet Singh and Upasana Taku, they commenced operations as a mobile wallet to make digital payments convenient for its users. Its use cases have since expanded to include bill payments, e-commerce shopping, food delivery, petrol pumps, large retail chains, pharmacies, Kirana stores, etc. Our platform also enables peer-to-peer payments via a unified payment interface (“UPI”), MobiKwik Wallet as well as MobiKwik Wallet to bank payments. Over the years they have amassed over 101 million Registered Users and more than 3 million e-commerce, physical retail, and biller partners.
In order to further enhance their value proposition to their online merchants, they introduced payment gateway subsidiary Zaakpay in 2012. Zaakpay enables online websites and mobile apps to collect payments from their users using multiple payment options, including debit cards, credit cards, mobile wallets, UPI, and net banking.
In May 2019, they launched MobiKwik Zip, our flagship BNPL product, with a focus on the Indian middle-class population to enable them to make payments for daily life use cases. MobiKwik Zip is focused on providing this unserved Indian population their first experience of credit.
They are a technology-first company leveraging big data analytics and deep data science (including machine learning) to continuously delight users and merchants on our platform. Their mission is to build a world class payments and credit product for Bharat!
INCORPORATION DETAILS
CIN | U64201HR2008PLC053766 |
Registration Date | 20 March 200 |
Category/Sub-category of the Company | Company limited by Shares |
Address of the Registered office and contact details | 5TH FLOOR, HUDA CITY CENTRE METRO STATION, SECTOR 29, GURUGRAM, Gurgaon, Haryana. |
Name, Address and Contact Details of Registrar and Transfer Agent, if any | Link Intime India Pvt. Ltd. Noble Heights, 1st Floor, Plot No NH-2, C-1 Block, LSC, Near Savitri Market, Janakpuri, New Delhi – 110058 |
BOARD OF DIRECTORS
Punita Kumar Sinha
Navdeep Singh Suri
Sayali Karanjkar
Raghu Ram Hiremagalur
Upasana Taku
Bipin Preet Singh
Chandan Joshi
SHAREHOLDING PATTERN | |||||||||||
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BUSINESS OUTLOOK
The company insists that the integration of its consumer payments segment (MobiKwik Wallet) with its BNPL business provides many competitive advantages to the latter. The large existing KYC base, big data to assess creditworthiness and a large merchant network directly facilitates growth in the BNPL segment, which reportedly remains profitable in the last two fiscals.
In fact, the wallet-based BNPL models seem to have inherent advantages over other models because they can be built on the back of a large customer base and data pool.
But speaking of data, MobiKwik has run into some concerning events related to data breaches in the past. On March 30th, 2021, the personal data of over 10 crores MobiKwik customers was leaked for sale on the dark web, making it one of the largest data breaches in India's history.
Events like these can offset years of business expansion and lead to user losses which quickly translate to financial and equity losses, occasionally causing even market upheavals especially for a listed company, which is where MobiKwik is soon headed.
Furthermore, the exposure to credit risk for companies like MobiKwik is significant considering its BNPL business that requires credit underwriting from partner banks and NBFCs (like Bajaj Finance, Aditya Birla, DMI Finance, etc.) for which MobiKwik provides financial guarantees. MobiKwik is also not a credit-rated institution at present which impacts its ability to access capital for future growth. The RBI's PAPG Guidelines also require payment aggregators like MobiKwik to acquire (and maintain) a net worth of ₹25cr ($3.3m) by 2023.
Even if it isn't a high target to achieve for a company eyeing a billion-dollar valuation, it indicates adherence to statutory prudential norms which could be tricky for certain companies, especially one like MobiKwik which has been charged with violation of RBI norms and awarded penalties in the past.
The fintech industry is growing large and fast but it is still in a relatively grey area in terms of regulatory compliance. Competition is fierce and there are bigger players in the space with larger user bases and brand recognition compared to MobiKwik. However, the company is willing to bet its IPO on the rising tide of the consumer internet economy in India and the possibility of that tide cascading successfully towards retail and digital businesses.
INDUSTRY OUTLOOK
Hailed as the third-largest fintech ecosystem globally, India’s successes lie not only in the establishment of 2,100 new firms, the bulk of which were set up in the last five years.
The total valuation of the industry is estimated at US$50-60 billion. According to a Boston Consulting Group report released March 2021, Indian fintech companies will reach a valuation of US$150-160 billion by 2025, becoming three times more valuable in five years.
A research report by RBSA Advisors stated: “Amid COVID-19, India has seen a 60% increase in fintech investments to US$ 1467 million in H1 2020 compared to the US$ 919 million for the same period last year.”
India’s fintech industry remained attractive despite the pandemic, with the emergence of three new unicorns and five new ‘soonicorns’ (US$500 million+ valuation) since January 2020.
Paytm, a fintech company, is India’s highest valued unicorn at US$ 16 billion, and out of 21 unicorns in the country – about one-third are fintech companies.
The Indian fintech ecosystem is made up of various sub-segments: payments, lending, wealth technology or WealthTech, insurance technology or InsureTech, regulation technology or RegTech.
Driving their growth are India’s numerous start-ups that offer innovative technologies to reduce the asymmetry of information between financial institutions and investors. India’s rapid adoption of digital/online payments, since the demonetization move in late 2016, has also heavily contributed to the growth of the country’s fintech market.
In 2020, fintech software-as-a-service (SaaS) and InsurTech entities saw total investments of US$145 million and US$215 million, respectively, representing a 4-5x growth over their 2015 funding flow.
Out of India’s 50+ fintech entities with more than US$100 million valuations, there are four wealth and broking fintech enterprises, five InsurTechs, and eight SaaS FinTechs.
Since 2016, the fintech industry has seen cumulative investments into domestic fintech entities worth more than US$10 billion.
Source: INDIA BRIEFING
KEY FINANCIALS OF A V THOMAS AND COMPANY LIMITED
STATEMENT OF PROFIT AND LOSS
(In Rs. Crores)
Particulars | 2021 | 2020 | 2019 |
Revenue from Operations | 27095.1 | 30562.9 | 11054 |
Other Income | 2071.6 | 2176 | 1995 |
Total Revenue | 291667 | 327389 | 130490 |
change % | -11% | 151% | |
EBITDA | -9921.4 | -8898 | -117830 |
DEP | 131 | 266 | 64.3 |
FINANCE COST | 714.4 | 1048.4 | 741.8 |
Total Profit for the period | -10766.8 | -10212.4 | -12589.1 |
Profit Margin | -3.69% | -3.12% | |
EPS( in Rs.) | -21.46 | -20.49 |
BALANCE SHEET (In Rs. Crores)
Particulars | 2021 | 2020 |
ASSETS | ||
NON CURRENT ASSETS | ||
Property, plant and equipment | 91.7 | 78.8 |
Right-of-use asset | 0 | 435 |
Investments | 4171.8 | 501.4 |
Loans | 200.9 | 139.4 |
Other financial assets | 610 | 0 |
Other tax assets (net) | 872.8 | 894.9 |
Other non-current assets | 4181.2 | 27.3 |
TOTAL NON CURRENT ASSETS | 10128.4 | 2076.8 |
CURRENT ASSETS | ||
Investments | 0 | 367.2 |
Trade receivables | 3197 | 1655.3 |
Cash and cash equivalent | 5404.3 | 810.2 |
Other bank balances | 13546 | 19742 |
Loans | 90.6 | 3210.1 |
Other financial assets | 7614.3 | 3789.3 |
Other current assets | 1633.7 | 1576 |
TOTAL CURRENT ASSETS | 31,485.90 | 31,150.10 |
TOTAL ASSETS | 41,614.30 | 33,226.90 |
EQUITY AND LIABILITIES | ||
EQUITY | ||
Equity Share Capital | 100.5 | 100.5 |
Instruments entirely equity in nature | 1442.7 | 1332.5 |
Other equity | -1532.6 | -2869.5 |
TOTAL EQUITY | 10.60 | -1,436.50 |
LIABILITIES | ||
NON CURRENT LIABILITIES | ||
Borrowings | 0 | 126.1 |
Lease liability | 0 | 307.8 |
Other Financial Liability | 3.5 | 3.5 |
Provisions | 230.6 | 182.4 |
TOTAL NON CURRENT LIABILITIES | 234.10 | 619.80 |
CURRENT LIABILITIES | ||
Borrowings | 5315.6 | 5753.6 |
Lease liability | 0 | 198.4 |
Trade payables | 7826.2 | 5554.9 |
Other financial liabilities | 26781.8 | 21568.3 |
Contract liabilities | 772.6 | 640.9 |
Other current liabilities | 548.5 | 263.5 |
Provisions | 124.9 | 64.6 |
TOTAL CURRENT LIABILITIES | 41,369.60 | 34,044.20 |
TOTAL LIABILITIES | 41,603.70 | 34,664.00 |
TOTAL EQUITY AND LIABILITIES | 41,614.30 | 33,227.50 |
FINANCIAL PERFORMANCE
Revenue from operations fell to INR 288.5 Cr from INR 355.6 CR in the previous year (FY20), which is just over 2X higher than the INR 148.4 Cr reported in FY19 (March 2019). Consequently, total income fell to INR 302 Cr from INR 369 Cr last year.
On a consolidated basis, the company spent INR 404 Cr, which is just 11% lower than the INR 454 Cr it spent in FY20. In terms of expenses, employee benefits expense accounted for INR 53.31 Cr in FY21, from INR 65.6 CR in FY20. Payment gateway costs were the most significant expense for Mobikwik, accounting for INR 151 Cr.
An area where Mobikwik did not significantly reduce spending is business promotions, which accounted for INR 80.3 CR in FY21, down just 14% from INR 93.4 Cr in FY20, but still higher than what the company spent in FY19 (INR 70 Cr)
As of March 31, 2021, Mobikwik said it had over 101.37 million registered users and more than 3.44 Mn online, offline and biller merchant partners. Speaking about the revenue performance last year, the company said that in particular, it experienced rapid growth in buy now pay later (BNPL) products since their introduction. But GMV from BNPL fell from INR 485 Cr in FY20 to INR 299 Cr in 2021.
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