MobiKwik valuation shrinks to $279 mn as Bajaj Finance gets higher stake

By Binu Paul

  • 16 Jan 2018
Credit: Mukul Mudgal/VCCircle

Bajaj Finance Ltd's stake in MobiKwik will increase to 12.60% from the 10.83% agreed earlier after the mobile wallet company's valuation fell.

The non-banking finance company had, in August last year, agreed to acquire a stake in One MobiKwik Systems Pvt. Ltd for about Rs 225 crore ($35.4 million then) by buying 10 equity shares and 271,050 compulsorily convertible cumulative preference shares.

After conversion of the preference shares, Bajaj Finance was expected to hold a 10.83% stake in MobiKwik on a fully diluted basis. This would have valued the mobile wallet company at Rs 2,077 crore ($327 million).

However, on Monday, Bajaj Finance said in a stock-exchange filing that its stake will increase due to a change in the conversion price of the preference shares. It added that it will not invest any additional amount in MobiKwik.

The change in Bajaj Finance's stake means MobiKwik is now valued around Rs 1,784 crore (about $279 million), down almost 15% from the valuation agreed last year.

"The development with respect to the change in shareholding of Bajaj Finance is the result of comprehensive business collaboration between the two companies," a MobiKwik spokesperson said, declining to comment on the valuation.

Bajaj Finance's investment is intended to support MobiKwik's existing lines of businesses, develop front-end applications for users availing its financial services, and to enable its customers to have a one-stop solution for all debit and credit spends.

Last year, the mobile wallet firm was in talks with existing as well as new investors to raise about $100 million in a new round of funding at a valuation of $1 billion.

MobiKwik, which claims to have a network of more than 15 lakh direct merchants and over 55 million users, has raised about $115 million in total funds so far from Sequoia Capital, Net1, Tree Line Asia, Cisco Investments, American Express and MediaTek so far.

MobiKwik competes with the likes of Paytm and FreeCharge.

In July last year, private-sector lender Axis Bank agreed to acquire FreeCharge from struggling e-commerce firm Snapdeal for about Rs 385 crore ($60 million).

Vijay Shekhar Sharma-led wallet firm Paytm pivoted to a payments bank, which went live in May 2017.